Fuzzy math for stimulus jobs

As the nation looks at the prospect of continued high unemployment despite a modest economic recovery, some economic policy choices made by President Obama and senior congressional Democrats at the beginning of the year have become apparent political traps.

Among these was the decision to emphasize government spending over tax cuts in the fiscal stimulus bill and to call it a "jobs bill" to "create or save" 3.5 million jobs. To emphasize the political point that they were "creating" jobs, Congress and the administration promised to report new jobs on a government Web site, recovery.gov.

After the first quarterly report was published, the White House claimed a minimum of 640,000 jobs and as many as 1.1 million had already been "created or saved" this year. But the fuzzy definitions and accounting rules distributed by the government to fund recipients and contractors were bound to lead to funny numbers, and enterprising reporters around the country quickly spotted big flaws in the report.

Further discomfiting the White House, the Government Accountability Office this week found "significant" errors on the recovery.gov Website, including claims that more than 58,000 jobs were "saved or created" by projects that had spent no government funds, and that no jobs were reported by some projects that had spent nearly $1 billion.

That did not go down well with voters or with their representatives, who are beginning to show anger at the slow pace of the recovery. On Wednesday, the chairman of the House Appropriations Committee, David Obey, D-Wis., himself a major architect of the stimulus bill, ripped the White House, saying, "The inaccuracies on recovery.gov that have come to light are outrageous…. Credibility counts in government and stupid mistakes like this undermine it."

But accurate reporting on the jobs bill's impact may not be possible. As Gene Dadaro, the acting director of the GOA, told a House committee Thursday, no one "can identify with certainty the impact of the Recovery Act because of the inability to compare the observed outcome with the unobserved, counterfactual scenario in which the stimulus does not take place." So there.

As Mr. Obey suggests, controversy over stimulus jobs undermines the expectation that government can lead a way out of the "jobless recovery" by spending more. A recent Rasmussen poll found that 51 percent of Americans already think more jobs would be created if the administration canceled stimulus spending. If the administration sticks with the phony "jobs bill" numbers, it may find less and less support for its economic plans.