Some folks are disappointed with the number of jobs created by the federal stimulus. But if the National Republican Congressional Committee is right, in Wisconsin, the stimulus is actually a jobs killer.
The NRCC works to get Republicans elected to the U.S. House of Representatives. One Democrat it wants to take down in the 2010 campaign is two-term Rep. Steve Kagen of Appleton. He faces Republican challenger Reid Ribble on Nov. 2.
In a TV ad, the NRCC aims to turn Kagen’s vote for the stimulus, and two other measures, against him.
"Kagen promised us jobs, voting for the $787 billion stimulus," the announcer says, referring to Wisconsin. "Cost: another 77,000 jobs lost."
When this is mentioned, a goofy image of Kagen giving two thumbs up pops up behind the Capitol building.
Similar images -- including one pairing Kagen with U.S. House Speaker Nancy Pelosi -- are used to underscore the message that Kagen’s votes "cost Wisconsin dearly." The other votes cited are on the cap-and-trade bill and a vote to raise the debt limit.
We homed in on the stimulus claim because it seems so counter-intuitive.
To be sure, critics say the cost of the stimulus has bought too few jobs, and point out that unemployment has only grown worse. U.S. Rep. Paul Ryan, R-Janesville, a leading conservative on budget matters, has said borrowing done as part of the stimulus will lead to "job-killing tax hikes" one day.
But the NRCC is claiming Wisconsin has already lost 77,000 jobs because of the stimulus.
"When I saw that ad," said Kevin Quinn, an economics professor at St. Norbert College in De Pere, "my response was that it was patently ridiculous."
Hold on, professor. Let’s look and see.
The ad starts by stringing together some correct information.
Kagen supported the $787 billion stimulus (although that estimate has since been boosted to $814 billion by the Congressional Budget Office). And Wisconsin has had a net loss of more than 77,000 jobs since the measure became law in February 2009, according to the U.S. Bureau of Labor Statistics.
When asked for facts to back up the stimulus claim in the ad, Tom Erickson, Midwest press secretary for the NRCC, provided the citation on the job-loss figures. But when we called and e-mailed asking for evidence that the lost jobs were a result of the stimulus, he did not reply.
Perhaps with good reason.
In logic class, this one falls under the category that correlation does not prove causation. Think of it this way: Incidents of drowning may go up at the beach at the same time ice cream sales rise. That doesn’t mean ice cream causes you to drown. It may just mean more people are at the beach.
Indeed, the consensus -- from several government and private-sector reports issued in 2010 -- is the stimulus has boosted employment. Directly and indirectly, the analysts conclude, the stimulus has created or saved more than 1 million, as many as 2.7 million, or even as many as 4.8 million jobs nationwide.
In Wisconsin, the federal government counted 16,348 jobs directly funded by the stimulus in the most recent quarter (April through June 2010) reviewed. In total, according to the state, the stimulus has created or retained 63,000 jobs in Wisconsin.
Let’s return to Quinn, the outraged economics professor. He said he is not supporting either candidate in the Kagen-Ribble race.
It’s fair to question how efficient the stimulus has been, Quinn said, but there is no debate it has created jobs, both directly and indirectly. And even though joblessness in Wisconsin has risen, it would have been worse without the stimulus injection, he said.
Quinn said the only way he could conceive of arguing that the stimulus killed jobs is if it increased taxes. But it didn’t. As our colleagues at PolitiFact National have reported, of the original $787 billion, $499 billion was to fund new roads, hire teachers and generally keep people employed, and about $288 billion -- or 36 percent -- was in tax breaks.
So is Quinn alone in his views? No.
"A broad spectrum of economists would say that the stimulus cannot have cost jobs," said Laura Dresser, associate director of the Center on Wisconsin Strategy (yes, COWS) at the University of Wisconsin-Madison. "The recovery spending increased demand in the economy, and that creates jobs directly, or indirectly, or saves jobs."
Some jobs are created or saved because they are funded directly by stimulus money, Dresser explained. And others are created and saved indirectly, she said -- partly as a result of spending done by people holding stimulus-funded jobs who would otherwise be unemployed.
We won’t add on any more economists.
In issuing its attack against Democratic U.S. Rep. Steve Kagen, the National Republican Congressional Committee said the federal stimulus bill cost Wisconsin 77,000 jobs. The two things may have happened in the same time frame, but that does not mean one caused the other. Indeed, there is plenty of evidence the stimulus has created jobs.
Here’s a more direct formula: Twisted logic + lack of evidence = Pants on Fire.
Congressional Budget Office, Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output From April 2010 Through June 2010, August 2010
Council of Economic Advisers,The Economic Impact of the American Recovery and Reinvestment Act of 2009(page 26 of report, page 31 of pdf), Jan. 13, 2010
E-mail interview with National Republican Congressional Committee Midwest press secretary Tom Erickson, Oct. 11, 2010
E-mail interview with Center on Wisconsin Strategy Associate Director Laura Dresser, Oct. 12, 2010
How the Great Recession Was Brought to an End, by economists Alan Blinder and Mark Zandi, July 27, 2010
Interview with St. Norbert College economics professor Kevin Quinn, Oct. 12, 2010
Kagen for Congress website, About Steve
Library of Congress, H.R.2454(cap-and-trade bill)
Library of Congress, H.R.1(stimulus)
Library of Congress, H.J.Res.45(raise debt limit)
Milwaukee Journal Sentinel, Stimulus gives Wisconsin a shot of federal money, Sept. 2, 2010
National Republican Congressional Committee, TV ad, Steve Kagen’s Costing Wisconsin Its Future
PolitiFact.com, Stewart claims that the stimulus bill is one-third tax cuts, Feb. 10, 2010
U.S. Bureau of Labor Statistics, Wisconsin unemployment figures, Oct. 12, 2010
Wisconsin Office of Recovery and Reinvestment, Recovery Act Job Creation, Oct. 12, 2010
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