Seven Big Lies about the Stimulus

The difference between 450 jobs and six.

By Stephen Spruiell

There have been dozens of news reports exposing tens of thousands of stimulus jobs as frauds — David Freddoso and Mark Hemingway of the Washington Examiner put the number of phony jobs at about 75,000. They found more than 100 separate incidents, but these incidents can be grouped into seven categories, representing the seven biggest lies the administration is telling you about the stimulus:



1. Raises = jobs: This one turns out to be pretty common. For example, the Associated Press reported that one nonprofit in Georgia used stimulus money to give its employees raises, then multiplied its total number of employees (508) by the percentage points of the raises (1.84) and told the White House that the stimulus had saved 935 jobs. (Its directors said they were just following instructions they received from the White House.) Other nonprofits did the same. According to the AP, this fraud exaggerated the number of jobs created or saved by 9,300.



2. Number of people who might benefit = jobs: According to the AP, East Central Technical College in Georgia used more than $200,000 in stimulus money to buy “trucks and trailers for commercial driving instruction, and a modular classroom and bathroom for a health education program.” Officials at the college reported that the spending created or saved 280 jobs, at a cost of $715 for each one. That’s miraculous — and impossible. As it turns out, “The 280 were not jobs, but the number of students who would benefit” from the spending.



3. Stimulus Money/Average Salary = jobs: The number of jobs the stimulus allegedly saved or created in Nevada was overstated by at least 4,000, according to a report in the Las Vegas Sun. The report states that local-government officials were told to “take the amount of stimulus money they received and divide it by $92,000, the theoretical average wage and benefits of a job.” As if this weren’t sketchy enough, officials actually divided by lower numbers — $66,681 for K–12 employees and $45,000 for higher-ed workers. In fact, the teachers’ jobs were probably secure — “I don’t for a moment believe that 4,000 teachers would have been laid off if not for the stimulus,” said Republican state senator Bill Raggio. The money allowed the state to avoid making cuts elsewhere.



4. Jobs funded by other federal programs = jobs: The Boston Globe reported that it found several cases in which “federal money that recipients already receive annually — subsidies for affordable housing, for example — was reclassified this year as stimulus spending.” Property companies in Massachusetts reported that such spending saved approximately 430 jobs, but an official at one of these companies admitted, “There were no jobs created. It was just shuffling around of the funds.” USA Today discovered that the Teach for America program misattributed 1,300 jobs to the stimulus; in fact, an unrelated government grant had funded the positions. And the Wall Street Journal found that “some low-income housing landlords whose decades-old contracts with the federal government were funded by the stimulus this year reported a total of 6,463 employees as having jobs linked to the stimulus package.” Those three examples alone account for over 8,000 phony jobs.



5. Whoops! = jobs: Many of the jobs reported as created or saved are nothing more than paperwork errors. In Blooming Grove, Texas, a local housing authority reported that “it created 450 jobs with a $26,174 grant to repair roofs on five apartment buildings,” according to the Dallas Morning News. The project actually involved six workers. And the AP reported that a company in Ohio used the same workers for two stimulus contracts and counted the workers twice. The AP found numerous other instances of double-counting, accounting for 1,350 phony jobs.



6. Summer jobs = jobs: The Dallas Morning News also found about 5,100 jobs that were summer positions for people 24 and younger. A spokesman for the program that placed the workers said that “a couple of handfuls, maybe 25” saw their summer jobs turn into permanent employment. Similarly, around 3,000 “jobs” in Michigan were seasonal. And the AP found a company that claimed to have created 4,300 jobs using stimulus money, 3,000 of which lasted about a month.



7. Phantom layoffs = jobs: State education departments proved to be the biggest source of exaggerated stimulus jobs. As mentioned above, some simply divided the amount of stimulus money they received by some number representing an average teacher salary. Other cases were even more egregious: In Washington State, government officials said that stimulus money saved the jobs of 24,000 teachers who were already under contract to finish out the school year. And in California, the California State University system reported that stimulus funds saved 26,000 jobs — over half of its work force. A CSU spokesman admitted, “This is not really a real number of people. It’s like a budget number.”



Under pressure to produce results, the administration has put forward a set of loose guidelines that invite stimulus recipients to exaggerate the number of jobs the stimulus has created or saved. It is a political metric — not a measure of something measurable — and it is starting to backfire on the administration. The more people question the administration’s job data, the more they might start wonder whether the stimulus has created any jobs at all.



— Stephen Spruiell is an NRO staff writer.