Seems to be the magic number these days, especially if you’re not quite sure what is needed. Oh, a round $700 billion might do…
The front page of today’s Washington Post (story by Lori Montgomery) read: “Democrats’ Stimulus Plan May Reach $700 Billion.”
And after today’s press conference unveiling the top of the Obama Administration’s economic team, this story on WashingtonPost.com (probably for tomorrow’s print edition):
The announcements came as Obama and his advisers made plans for a massive fiscal stimulus package that some Democrats estimated could cost between $500 billion and $700 billion. The program would be aimed at creating or preserving 2.5 million jobs over the next two years, primarily by spending billions of dollars to rebuild roads and bridges, modernize public schools and tap alternative sources of energy.
Now 2.5 million jobs is indeed a lot of jobs to create, even as a “gross” increase. (Obama’s advisors have explained that there will still likely be a net loss of jobs in 2009, as without the stimulus we’d lose more than jobs created/saved by the stimulus.) $500 billion to $700 billion to get there implies $200,000 to $280,000 spent per job created/saved. If we could also get some new infrastructure out if it, I suppose that is not a bad deal, even if we have to deficit-finance it. But if it instead fails to generate new, sustainable jobs, physical capital, technologies, and industries for our economy, and meanwhile racks up a considerable amount of new debt that will remain on the federal books for a long time (to be paid off by our children and grandchildren later), then it won’t look like such a great deal.
UPDATE (9 pm): This Wall Street Journal article by Jonathan Weisman clarifies the NEC and CEA appointments that caught the WSJ by surprise; they incorrectly speculated yesterday that Jack Lew would be named NEC head and Austan Goolsbee CEA head. The relevant paragraphs in today’s report:
The appointment of Mr. Summers as NEC director scrambled other posts on the Obama economic team. Jacob Lew, a former White House budget director in the Clinton administration, had been expected to take that post, but he was nudged aside.
Austan Goolsbee, a young University of Chicago economist and longtime adviser to Mr. Obama, was widely expected to be the chairman of the Council of Economic Advisers. Now, according to aides, he is likely to serve on the council but not chair it.