President Obama will Speak on Jobs Tomorrow

This afternoon, White House Press Secretary Robert Gibbs told reporters, ” Well, I would describe tomorrow as not the totality of all the president’s ideas. The president will discuss a few ideas that he has heard in his discussions with CEOs and small businesses. I think, obviously, one of the things the president talked about today was that even as — even as things are getting better for larger banks, that there are many, many small businesses throughout the country that still have a lot of problems in getting access to the type of credit that they were normally getting before the economic — the great economic downturn. We are looking at ways that would help small businesses get that credit; find access to that capital. And the president will discuss other ways that he believes the government can assist the private sector in an atmosphere that leads to additional hiring and jobs.”

President Obama will speak at 11:25 AM from the Brookings Institution to a specially invited audience. Maybe he has some new ideas, but the bulk of job creation that can be achieved in the next year is already baked in the cake of the $787 b. American Recovery and Reinvestment Act, which he signed on February 17, 2009. On November 6, he signed H.R.3548 to extend unemployment insurance benefits, to extend the homebuyer tax credit, and to establish a 5-year net operating loss for businesses with losses in 2008 or 2009. Although it was “paid for” over 10 years, it was estimated to add $38.9 b. of tax cuts and $5.7 b. of increased spending this fiscal year. The House is poised to pass a third job creation bill in the next few weeks, based upon the President’s proposals, and the Senate might go along in January.

We’re unlikely to ever know with much certainty how many jobs were actually created because we can only estimate with imperfect models what the jobs picture would have been like without this legislation. Recovery.gov tries to measure jobs created by the stimulus bill, currently showing 640,329 jobs created as of 10/31/09, but that has its flaws. ARRA ordered the Government Accountability Office to issue a report every quarter on the jobs created by ARRA, and this is the most thorough and balanced analysis we’re ever likely to see. On November 19, GAO concluded:

“Even if the data quality issues are resolved, it is important to recognize that the FTEs in recipient reports alone do not reflect the total employment effects of the Recovery Act. As noted, these reports solely reflect direct employment arising from the expenditure of less than one-third of Recovery Act funds. Therefore, both the data reported by recipients and other macroeconomic data and methods are necessary to gauge the overall employment effects of the stimulus. The Recovery Act includes entitlements and tax provisions, which also have employment effects. The employment effects in any state will vary with labor market stress and fiscal condition, as discussed in this report.”

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