One of the problems with the “stimulus” model for economic policies is that, forgetting the jobs destroyed by the taxes which fund the stimulus spending, any jobs created (or saved!) by the stimulus spending will only last as long as the spending does.
And, indeed, as Obama goes around the country pitching his sequel to 2009′s hundreds of billions of dollars in stimulus spending, the “American Jobs Act,” he tells Americans how many jobs the bill will fund in their communities. But he forgets to mention that the funding will only last a year.
RALEIGH — President Barack Obama stood before thousands of screaming supporters at North Carolina State University Sept. 14, urging Congress to pass the American Jobs Act, his $450 billion plan to create jobs and stimulate the economy.
“Pass this jobs bill, and there will be funding to save the jobs of up to 13,000 North Carolina teachers, cops, and firefighters,” he said. But he didn’t say that his bill would fund the jobs only for one year. Nor did he say how the jobs would be paid for after that — or whether state and local governments would have to lay off other public employees to maintain the jobs of those hired under the bill.
A White House press release describing the benefits to North Carolina was more specific. “These funds would help states and localities avoid and reverse layoffs now, and will provide $900,300,000 in funds to North Carolina to support 13,400 educator and first responder jobs.”
As in the president’s comments, the White House press release does not specify how long the jobs would be funded. Dividing $900,300,000 by 13,400 yields $67,186.57 to cover salary, benefits, and any other costs associated with providing each job in North Carolina. Since the average annual cost of teacher pay and benefits in the state is $56,000, funding in Obama’s jobs bill would cover a little more than one year of compensation.
This is why stimulus spending doesn’t work. Eventually, the funding runs out, and taxpayers are left trying to figure out not only how to pay for the stimulus spending but how to continue paying for all the jobs the stimulus “created or saved.”
You can’t fill a pool by taking water from one end and putting it in the other.