20 Jan 2010

You Get What You Pay For?

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Someone help me out here. Krugman discusses a CBO report on government job creation efforts. If you look at the chart he reproduces, you see that the single most effective program of job creation–where the unit of measurement is “Years of Full-Time Equivalent Employment per Million Dollars of Total Budgetary Cost”–is “Increasing Aid to the Unemployed.”

Now what in the world does that even mean? On the one hand, it seems like the very worst thing you could do to create jobs would be to pay people for not having a job. Note, that consideration alone doesn’t mean unemployment checks are a bad thing, but they certainly don’t “create jobs.”

So I am thinking what that ranking really means, is that if you spend $1 million on expanding unemployment relief programs, then the recipients get more take-home money for their “job” of being unemployed, than if you spend $1 million on green jobs and then count how many more people have jobs making solar panels.

I’m not being sarcastic, I really think that’s what this CBO report means. Can anyone confirm or deny?

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