Morning Joe hosts did not challenge Thune's claim that the creation of "government jobs" doesn't stimulate economy

››› ››› ERIC HANANOKI

Joe Scarborough and Mika Brzezinski did not challenge Sen. John Thune's claim that the creation of "government jobs" does not stimulate the economy. In fact, Congressional Budget Office director Douglas Elmendorf has stated that, "in terms of the short-term stimulus, either kind of job [government or private sector] works because the people who get those jobs and receive the paycheck go out and spend it, and that's -- or spend much of it, and that is the multiplier effect that economists talk about."

During the February 4 edition of MSNBC's Morning Joe, host Joe Scarborough and co-host Mika Brzezinski did not challenge Sen. John Thune's (R-SD) claim that the creation of "government jobs" doesn't stimulate the economy. Thune claimed that the legislation before Congress "creates a lot of government jobs," adding, "We don't think that you -- that government creates jobs. I mean, government can create government jobs. But the way you create jobs in the private sector is to get money back into the economy, in the hands of people and small businesses, who actually are the job creators." However, Scarborough and Brzezinski did not note that CBO director Douglas W. Elmendorf stated in congressional testimony that when comparing the effectiveness of government jobs with private sector jobs in stimulating the economy, "in terms of the short-term stimulus, either kind of job works because the people who get those jobs and receive the paycheck go out and spend it, and that's -- or spend much of it, and that is the multiplier effect that economists talk about."

Additionally, Scarborough and Brzezinski did not challenge Thune's claim that "what CBO said was that it -- only 12 percent of this is going to be spent this year and under 50 percent next year. So it doesn't really happen for two years. So the question is: Does it really stimulate the economy?" Scarborough and Brzezinski did not note that CBO has answered that question. In analyzing the House version of the bill, and the proposed Senate version, CBO stated that it expects both measures to "have a noticeable impact on economic growth and employment in the next few years." Additionally, as Media Matters for America documented, in his January 27 testimony before the House Budget Committee, Elmendorf said that H.R. 1 would "provide massive fiscal stimulus that includes a combination of government spending increases and revenue reductions." Elmendorf further stated: "In CBO's judgment, H.R. 1 would provide a substantial boost to economic activity over the next several years relative to what would occur without any legislation."

Further, Thune's claim that CBO has said that "only 12 percent of this is going to be spent this year and under 50 percent next year" is false. In fact, CBO's cost estimate of the Senate version of the recovery plan -- based on the federal government's accounting period, in which a "fiscal year" begins on October 1 -- estimated that 26 percent of the bill would be spent before the end of fiscal year 2009 and an additional 52 percent during fiscal year 2010, for a total of 78 percent spent by the end of fiscal year 2010. Additionally, CBO's cost estimate of the House version of the recovery plan estimated that 21 percent of the bill would be spent before the end of fiscal year 2009 and an additional 43 percent during fiscal year 2010, for a total of 64 percent spent by the end of fiscal year 2010.

From Elmendorf's January 27 testimony (accessed from the Nexis database):

REP. ROBERT ADERHOLT (R-AL): The President has talked about saving or creating thirty -- three million to four million jobs, with 90 percent of them in the private sector. About 200 billion to 300 billion in those proposal -- somewhere between 25 and 35, 36 percent -- will be spent on government programs that have very little connection to the private sector. Even accepted the administration's estimates, how many government jobs would this bill create?

ELMENDORF: That -- I'm sorry. That's a question we have not tried to answer. It is quite complicated. The estimates that we've made, as I say, divided all the parts of the bill into half a dozen categories with different multiplier effects, different bang for the buck. But to address the private-sector job count, we'd have to drill that much deeper and really investigate what happens at a very particular level.

So there will be some highway projects that will involve private contractors and some that will involve government employees. There can be school construction done by employees of the Montgomery County Public School System and some school construction done by private employees under contract from the Montgomery County Public School System. So to figure out who is actually getting a government paycheck and a private paycheck could be very complicated, and we just have not -- I'm not sure we could, and we have not tried.

ADERHOLT: What are your thoughts, as far as taking the government jobs and stimulate the economy as opposed to private-sector jobs, as far as how those compare and as far as the overall stimulation of the economy?

ELMENDORF: Again, in terms of the short-term stimulus, either kind of job works because the people who get those jobs and receive the paycheck go out and spend it, and that's -- or spend much of it, and that is the multiplier effect that economists talk about. I think the differences would come down to what you judged as the most effective in supporting long-run economic growth, more than in terms of a short-term stimulus.

From the February 4 edition of MSNBC's Morning Joe:

BRZEZINSKI: I'm just wondering why there was such a difference in opinion. When you talk to the Obama administration or a Democrat behind this bill, they'll say this will create and retain 3 to 4 million jobs. You talk to a Republican, they'll say this is -- this creates no jobs. It does nothing for job stimulus.

THUNE: Well, it does. It -- I mean, you can talk to different economists; they'll give you different views on that. But what CBO said was that it -- only 12 percent of this is going to be spent this year and under 50 percent next year. So it doesn't really happen for two years. So the question is: Does it really stimulate the economy?

And, secondly, it creates a lot of government jobs. I mean, you look at some of the places where this money is spent, there are some places -- in the State Department, for example -- where it's going to be over a million dollars per job. We don't think that you -- that government creates jobs. I mean, government can create government jobs. But the way you create jobs in the private sector is to get money back into the economy, in the hands of people and small businesses, who actually are the job creators.

SCARBOROUGH: OK, so let me get this straight. So --

BRZEZINSKI: Yeah. OK.

SCARBOROUGH: So, in the State Department, Mika, they're going to get this money --

BRZEZINSKI: Right.

SCARBOROUGH: -- and it's going to cost $1 million per job for like these State department jobs. And yet, they're telling people that are running the biggest financial institutions in America they can only make half a million dollars a year. Ain't government great? OK, so, in closing --

BRZEZINSKI: You gotta have some strings attached -- handing out money.

SCARBOROUGH: In closing, John, you ran against [former Sen.] Tom Daschle [D-SD].

Posted In
Economy, Jobs, Wages, & Unemployment
Network/Outlet
MSNBC
Person
Joe Scarborough, Mika Brzezinski
Show/Publication
Morning Joe
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