President-elect Barack Obama has said his $700 billion stimulus package will add three million jobs to the economy. Skeptics don't think this is possible because the recession has grown stronger at a speed most economists did not anticipate.
Now, Obama's people think he can do ever better. According to the AP, "President-elect Barack Obama countered critics with an analysis Saturday by his economic team showing that a program of tax cuts and spending like he's proposed would create up to 4.1 million jobs." That math is hard to defend.
The economy lost 540,000 jobs in December. Some experts say it could stay on that pace for the first half of this year. If so, the economy will drop another three million jobs. Certainly looking at the full year, the three million number is certainly reasonable.
Much of the Obama plan is based on building out infrastructure for the energy grid, medical IT, and public works. Programs of that magnitude could take several quarters to get in place. They will involve complex logistics and new agencies to supervise them. By the time most of that is up and running, it could be near to the close of the year.
The reasons that adding four million jobs in America is unlikely is that the economy will shed jobs faster than a stimulus package can ad them, certainly during the period when the economy may be taking its hardest hit. Obama can't fill in that hole fast enough, let alone build a mountain on top of it.
Douglas A. McIntyre is a editor at 247wallst.com.