Is paying $2 million per job "saved or created" a good investment?

This falls into the “You can’t make this stuff up” category.  The failure of the so-called stimulus plan has been well documented and there are plenty of examples.  The latest, courtesy of the city of Los Angeles, is the revelation that after spending $111 million, a mere 55 jobs were “saved or created.”

The $814 billion American Recovery and Reinvestment Act (ARRA) rammed down our throats by President Barack Obama and the United States Congress was supposed to save our economy.  We were assured that the massive spending bill would keep unemployment from rising above 8% and bring the economy back from the brink.

A quick look at some numbers shows just how (un)successful the Democrat-led nation has done:

• The unemployment rate has continued to grow and hovers just shy of 10%. 
• The national debt is now approaching $14 trillion (with a T) an amount that has each U.S. taxpayer owing $121,234 as of this writing. 
• The U.S. poverty rate climbed to 14.3% in 2009, the highest level since 1994 and a 13.2% jump over 2008.
• Home foreclosures are at their highest since the real estate crisis began, up 25% since just a year ago.

How can that be?  The stimulus was supposed to help stem the bleeding.

It could have something to do with the fact that virtually anything the government manages fails (see Fannie Mae / Freddie Mac, Social Security, Medicare, etc).  The latest evidence comes from Los Angeles, California.

City Controller Wendy Greuel announced this week that the City of Angels has received $111 million in stimulus funds.  The return on the taxpayer investment?  55 jobs “saved or created.”  That equates to a cost of over $2 million per job. 

Greuel said, “With our local unemployment rate over 12% we need to do a better job cutting red tape and putting Angelenos back to work.” 

The report released by the city said that the Los Angeles Department of Public Works created 45.46 jobs when it was expected to create 238 from the $70.65 million it received.  The Department of Transportation received $40.8 million but only created 9 jobs when it was expected to create 26 jobs.

The failure is obvious. 

It is also amusing to look at the “expectations.”  Even if the city achieved its goals, each of those jobs in public works would have cost the taxpayer $298,319 and the transportation jobs would have cost $1.5 million per job.  A good use of taxpayer money?

This type of mismanagement would get any manager in private industry fired on the spot.  Come November a number of folks in Washington DC will have the same experience.

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