Commentary

Government will create how many jobs?

Ever wonder where the numbers purporting to show the government will create jobs come from? Ron Utt at the Heritage Foundation has an excellent and accessible report (Backgrounder No. 2121) breaking down the studies and why they are misleading. It’s worth a thorough reading by anyone tracking the debate over the stimulus package. As Utt notes:

As this paper demonstrates, most of the alleged economic benefits are based on grossly exaggerated claims made by a U.S. Department of Transportation (USDOT) computer simulation conducted in 2000 and 2002. In fact, the vast majority of independent academic and federal government studies on the rela?tionship between infrastructure spending and eco?nomic activity have found that the impact is very modest and long in coming.

Notably, Ron received his Ph.D. in economics from Indiana University (and a BA in business administration from Penn State) and has a largely empirical background in academic research. He know that which he criticizes. As an eonomist who has worked on teams generating these kinds of economic impact numbers, I can attest to the accuracy of Utt’s analysis as well.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.