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January 12, 2010

Oh, Dear: Obama Changes "Saved or Created" Accounting to "Saved or Created... By Someone Else Entirely"

We have endlessly rehashed how jackass and brazen Obama's "saved jobs" fudge is.

But even with that massive fudge factor, he's still showing no job growth.

Well, duh. The unemployment rate is at 10.0% and the real unemployment rate is somewhere around 22%. (Think about that: More than one fifth of American workers are jobless.)

And it's going up to 10.5%.

So this jackass needs some sort of propagandistic lie, no matter how ridiculous, to hang his hat on.

So he's changing the already sketchy accounting on his "saved" jobs. Bear in mind, he previously ordered companies receiving federal money to report any job as "saved" if even a single dollar -- a single dollar! -- of federal money contributed to the salary or other costs involved.

But apparently the recipients of federal largesse didn't understand the wink-wink-pad-these-numbers-to-the-utmost nature of his order.

He's making it more explicit now that the goal is not to achieve any sort of honest accounting, but simply to pad the made-up figure with as many made-up "saved jobs" as possible.

[I]nstead of counting only created and saved jobs, it will count any person who works on a project funded with stimulus money—even if that person was never in danger of losing his or her job.

The new rules came out last month in a little-noticed memo (PDF) sent to federal agencies by Peter Orszag, director of the Office of Management and Budget. OMB said it changed the guidelines to prevent the kinds of errors and confusion that occurred when the first job counts came out in October.

But Rep. Darrell Issa of California, the top Republican on the House Oversight and Government Reform Committee, said the Obama administration is making the job numbers even more misleading and is trying to pump them up by counting jobs that weren’t created or retained.

Oh, and he'll also dump the current running-tally system in favor of a quarterly report.

I call shenanigans. In a running tally, if a job is "created" but then, as Obama's fake jobs tend to do, vanishes a month later, a running tally would have to record this (or should record it) as +1 and then -1, net zero.

Now, if you count them only according to jobs "created" in a quarter: Imagine in Quarter 1 you create a job, which disappears in a month. In Quarter 2, you create another job, which disappears in a month.

What does your tally look like in Quarter 3?

Well, in Quarter three, if you were keeping a running tally, you'd say you created two very short-term jobs which now no longer exist.

In a quarterly report style, you can say you created two jobs. After all, add the quarterly numbers together -- you created one in Quarter 1 and another in Quarter 2; that sums to two, right?

This system more easily allows you ignore jobs disappearing by only recording the pluses, and not the minuses.

In addition, I figure you can "save" the same damn job four times in the space of one year, one time each quarter. (Especially if it's not even a saved job at all, merely a partially-taxpayer-funded one, as the new rules stipulate.)

Oh well. We didn't get any jobs out of that $1.1 trillion, but we've got some sweet propaganda and accounting tricks that would make Enron blush.

And we've got something else, too.

A new report that reviewed 200 years of economic data from 44 nations has reached an ominous conclusion for the world’s largest economy: Almost without exception, countries that are as highly indebted as the United States is today grow at sub-par rates.

The report was written by two respected academic researchers who recently published a thick book on eight centuries of economic crises.

The study by Carmen Reinhart and Kenneth Rogoff — well-regarded economists from the University of Maryland and Harvard University, respectively — found statistical breaks at different points in the relationship between a country’s national debt and its gross domestic product. GDP is the broadest measure of a country’s trade in goods and services.

When a nation’s debt exceeds 60 percent of its GDP, its growth rate slows precipitously, the study found. When that ratio exceeds 90 percent, nations’ economies barely grow, and can even contract.

The U.S. national debt is at roughly 84 percent of the country’s GDP, and it is projected to cross the authors’ 90 percent threshold late this year or early next year.

The implication is stark: The authors don’t say that the U.S. economy can’t grow briskly despite even higher debt, but if it does, it would be an outlier in roughly 200 years of economic statistics.

The man's going to have a legacy, that's for sure.

So, is it true, as Paul Krugman assured us, that every dollar of government spending somehow magically creates $1.50 in actual value?

Seems not.

Economic data contradict Keynesian stimulus theory. If deficits represented "new dollars" in the economy, the record $1.2 trillion in FY 2009 deficit spending that began in October 2008--well before the stimulus added $200 billion more --would have already overheated the economy. Yet despite the historic 7 percent increase in GDP deficit spending over the previous year, the economy shrank by 2.3 percent in FY 2009. To argue that deficits represent new money injected into the economy is to argue that the economy would have contracted by 9.3 percent without this "infusion" of added deficit spending (or even more, given the Keynesian multiplier effect that was supposed to further boost the impact). That is simply not plausible, and few if any economists have claimed otherwise.

Via Big Government and, I think, maybe... Instapundit? I dunno, I've had that debt-warning link open for a long time.

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posted by Ace at 11:56 PM

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