***** PLEASE SEE UPDATED AND CORRECTED ENTRY OF 2/13/09 HERE *****
Remember the infamous “Bridge to Nowhere”? Designated one of the all-time great examples of political “pork” spending, it was widely criticized for a high cost that benefitted so few.
So how does the economic efficiency of job creation of the current stimulus proposal stack up against that of the “bridge to nowhere”?
According to reports of a recent letter from the CBO, the stimulus is expected to create (short term only) between 1.3 and 3.9 million jobs. Taking the midpoint of that range, 2.6 million jobs, and assuming a stimulus cost of $838 Billion, that works out to $322,308 per job created.
The “Bridge to Nowhere” was awarded the “Golden Fleece Award” by the group, Taxpayers for Common Sense, in 2003. At that time the group believed that the project would require an outlay of $190 Million. The bridge was expected to generate 470 jobs. That works out to $404,255 per job (subsequent estimate of costs were higher).
So, the “poster child” of pork spending equated to $404,255 per job, and the stimulus bill works out to $322,308 per job. That’s an efficiency improvement of 20.3%. Perhaps that’s what the market is “celebrating” today (DJIA down 400)?