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Viva Le Me
Registered: Jul 2000
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An Obvious Point: The Cost of Jobs
Thought this was an interesting article. It's a basic point that isn't very hard to refute (i.e. that more jobs, in theory, would end up paying back some of the deficit), but, I thought it frames it in an interesting way.
Flame away at your leisure. Something to talk about besides Iraq, anyway.
How Much Would You Pay to Create One Job?
The Gadflyer does the math on Bush's "job creation" – and it's no bargain
by Paul Waldman, Editor-in-Chief
4.12.04
The recent report from the Bureau of Labor Statistics that the American economy created 308,000 jobs in March was greeted by President Bush with a proclamation that "The tax relief we passed is working." Naturally, Democrats took issue with Bush's conclusion. But for the sake of argument, let's assume Bush is right, and the tax cuts led to the job growth. We at The Gadflyer thought we'd do some quick math to calculate just how much each of the jobs Bush has created cost the American government.
Since Bush is already pretty deep in the hole when it comes to jobs – and it's going to take some pretty fantastic job growth to put him in the black – I decided to give him the benefit of the doubt and put the most optimistic spin possible on things, assuming that the economy will continue to create jobs at its March pace. So I've made some projections into the future in order to calculate the cost per job of Bush's tax cuts.
In order to add up the cost of the Bush tax cuts, you have to look at two sets of numbers, the cost if the cuts "sunset" and the cost if they don't. When the Republicans passed the tax bills, they set the cuts to magically disappear in later years, as a way of hiding their true cost. The assumption was that eventually Congress would make the cuts permanent. And in fact, that's just what Bush is campaigning for right now.
So what did they cost?
2001-2010, with sunsets: $2.29 trillion
2001-2010, without sunsets: $3.25 trillion
Some awfully big numbers. But to see how Bush has done so far, let's start by looking only at what the tax cuts will have cost through the end of 2004: $749.1 billion. And let's say the economy continues to create 300,000 jobs a month from here to the end of the year, something even the pollyannas in the Bush administration wouldn't predict. At the moment, Bush is still 1.84 million jobs in the hole, but 9 more months at 300,000 jobs per month would leave him at the end of the year with a net of 860,000 jobs created for his first term. That gives us the following:
$749.1 billion (cost of tax cuts, 2001-2004)
/ 860,000 jobs
= $871,046 per job
Those must be some jobs. But Bush would probably say that we won't see the full effect of his tax cuts in the short run. So let's project this out to the end of a potential second Bush term. If we continue on the torrid job creation pace of 300,000 jobs per month, or 3.6 million per year, we end up with a net job creation at the end of 2008 of 15.2 million jobs. That would be pretty tremendous, anyone would agree, but remember, we're trying to put the most pro-Bush spin we can on things. Here is the cost of the tax cuts through the end of Bush's second term:
2001-2008, with sunsets: $1.7 trillion
2001-2008, without sunsets: $2.19 trillion
This means that if the sunsets stay in place, and the economy creates a stunning 15 million jobs in the four years of Bush's second term, the cost per job will be...
$111,402 per job if the tax cuts sunset
$143,512 per job if the tax cuts are made permanent
Since Bush is adamant that the sunsets must be removed and the tax cuts made permanent in order to reap the full job-creating benefits, we can take him at his word. Keep in mind that for Bush's second term we've predicted an absolutely stunning rate of job growth, and even so each job costs $143,512.
Of course, Bush would argue that tax cuts aren't really a "cost" at all. But those tax cuts have led to the highest budget deficit in American history, every dollar of which will have to be paid for with cuts in programs or higher taxes in the future.
Perhaps it's time for reporters to begin asking President Bush and his spokespeople just how much they think it should cost to create a single job. Right now there are approximately 10 million people out of work in the United States. If we gave each of them $143,512, it would cost $1.43 trillion, less than half the ten-year cost of Bush's tax cuts if they are made permanent.
Now there's an idea.
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04-15-2004 04:05 AM
