Obama and Dems Making Unverifiable Economic Claims

Not that we didn't know it, but the President and Congress are simply making things up as they go along. To be frank the President essentially admitted it when he declared all spending is stimulus, Surly a simplistic view of pump priming.

WASHINGTON (AP) -- If space exploration were conducted like the job forecasts under the government's new stimulus law, man surely would have missed the moon. But this isn't rocket science.

No promise from President Barack Obama is more important to the wounded economy than his vow to save or create some 3.5 million jobs in two years. In support of that bottom line, the government even tells states how many jobs they can expect to see from the spending and tax cuts.

But precise trajectories are impossible to plot and even approximations can be wildly off, as the authors of these forecasts acknowledge, usually more readily than the policymakers who use them to promote the plan.

A few key points:

Among the assumptions used in White House and congressional forecasting:

--Every one-point gain in the gross domestic product will translate into 1 million jobs.

--For every two jobs directly created by the stimulus spending, a third job will be indirectly created. The 2-to-1 ratio is rough and varies considerably by sector.

--For each dollar states receive from Washington, they will decide to use 60 cents to avoid spending cuts, 30 cents to avoid tax increases and 10 cents to reduce drawdowns of their rainy day funds.

--A tax cut has only one-quarter of the value of a spending increase of the same size, in terms of expanding the economy.

--Every dollar spent on unemployment benefits is worth $1.63 of quick economic expansion. Food stamps boost the economy even more.

The overarching goal -- and promise -- of saving or creating 3.5 million jobs is built on vagaries such as these.