The GovMath Report

Background:

What spurred this calculation was a 1 minute report on CNN I saw in the summer of 2010.  The theme of this report was “Where are our economic stimulus dollars going?”  This referred to the American Recover and Reinvestment Act (“stimulus package”) passed by the US Congress in October of 2009.  This report concentrated on the State of Michigan and shed a very positive light on how the dollars were being spent to create jobs there.  The report ended with the statement “That’s one good example of how our stimulus dollars are being spent to get us all out of this recession!”  The thing that amazes me is that the reporter displayed a map of Michigan which showed the “jobs created” and “stimulus money received” by Michigan, but never pulled out a calculator and did some simple division, which I quickly did in my head while watching the report.  He may not have wanted to, because if he did, his report would have had a much less positive slant.

Metrics:

Data Point: Stimulus Dollars Received by Michigan

Number: $3.094B fully received as of 09/21/10 out of a total of $7.633B committed to state.

Description: Michigan Stimulus dollars already received.  This does not include dollars committed to, but not yet received by Michigan.

Source: recovery.gov

Data Point: Jobs Created by Stimulus Dollars in Michigan

Number: 17,831 jobs created or saved due to Stimulus dollars received as of 09/21/10

Description: These are claimed jobs created or saved by stimulus dollars in Michigan.  Most analysts conclude this data is padded to be high, but will not debate this here and use it as the best case scenario.

Source: recovery.gov

Calculation:

Average Cost of a Single Job Creation in Michigan = Stimulus Dollars Received by Michigan / Jobs Created by Stimulus Dollars in Michigan

$173,541.02 = $3,094B / 17,831

Conclusion:

$173,541 per job saved or created.  Given that the average salary in Michigan is $34,025 (infoplease.com for 2009), the federal government could have paid over 5 people to do nothing for a year for each job they created.  Doing some basic math on the other states offers similar results.

If the CNN reporter would have had this number plastered on the State of Michigan map, he could not have given such a rosy report.