Massachusetts Flubs Stimulus Jobs Numbers: How Many Other States Followed Suite?

The state of Massachusetts has received almost $4 billion in stimulus funds and has reported back to the fed that they saved or created 12,374 jobs but, as the Boston Globe investigations point out, that number was “wildly exaggerated.”

The Globe’s finding is based on the federal government’s just-released accounts of stimulus spending at the end of October. It lists the nearly $4 billion in stimulus awards made to an array of Massachusetts government agencies, universities, hospitals, private businesses, and nonprofit organizations, and notes how many jobs each created or saved.

But in interviews with recipients, the Globe found that several openly acknowledged creating far fewer jobs than they have been credited for.

One of the largest reported jobs figures comes from Bridgewater State College, which is listed as using $77,181 in stimulus money for 160 full-time work-study jobs for students. But Bridgewater State spokesman Bryan Baldwin said the college made a mistake and the actual number of new jobs was “almost nothing.’’ Bridgewater has submitted a correction, but it is not yet reflected in the report.

Boston Land Company’s director of property management, Susan Kelly, said “There were no jobs created. It was just shuffling around of the funds.” After reporting that her company retained 26 jobs she said “It’s hard to figure out if you did the paperwork right. We never asked for this.”

The federal stimulus report for Massachusetts has so many errors, missing data, or estimates instead of actual job counts that it may be impossible to accurately tally how many people have been employed by the massive infusion of federal money. Massachusetts is expected to receive an estimated $1 billion more in stimulus contracts, grants, and loans.

The following is the list of projects funded by the American Recovery and Reinvestment Act of 2009 that claim to have added or saved at least 10 Massachusetts jobs.

With this type of creative accounting going on in Mass. one has to ask if other states were just as confused while filling out these reports and whether or not the actual number of jobs created or saved as they reported them are accurate?

Adding to critics distrust, is the fact that all evidence seems to be proving that Stimulus as defined by this administration equals more unemployment!

“Stimulus” is in the process of turning a nasty recession into a genuine depression. The evidence is in the “Employment Situation” report released by the Bureau of Labor Statistics (BLS) on November 6th. The “headline” unemployment rate shot up to 10.2%, the highest in more than 26 years. But the report was much worse than most people realize.

The “household survey data” showed that 589,000 jobs vanished during October. This is bad enough, but the three-month moving average of changes in total employment (current month and prior two months) shows that job losses are actually accelerating.

The three-month moving average (TMMA) of changes in total employment began a serious decline in February 2007. It went into negative territory two months later. This indicator has now been negative for the past 21 months. During this time, total employment has declined by more than 8 million jobs.

According to the RCP article mentioned above “The FY2009 Federal deficit was $1.4 trillion. This was almost a trillion dollars higher than FY2008. The capital to buy this additional debt had to come from somewhere, and much of it was squeezed out of business. Here are some indicators, both statistical and anecdotal:”

• During FY2009, “Gross Domestic Private Investment” fell by 25% (almost $500 billion/year). It would have needed to grow by 5% to keep the unemployment rate from rising from an already-too-high 6.2%.

• Many venture capital firms are informing entrepreneurs that there is no money available for new startups. The firms say that they must husband their capital to meet the needs of their existing portfolio companies.

• The 500 largest U.S. non-financial companies now hold more than $1 trillion in Treasury bills, amounting to more than 10% of their total assets. Corporate cash flows are rising, but the money is being invested in government bonds, rather than growth.

• Banks have cut credit card credit lines by 25%, or $1.25 trillion. Because small businesses are often financed with personal credit cards, this has a direct impact on small business survival and growth.

If you divide the total real capital employed in the U.S. (”produced assets”) by total employment, you get about $313,000. That is, for $313,000 in capital, the private economy can create one real, permanent, self-supporting job. In contrast, there are estimates that each of the jobs that the administration claims that “stimulus” has “created or saved” is costing about $1.2 million.

Additionally, The Federal Housing Administration signaled yesterday that it’s running dangerously low on its cash reserves and may need a Bailout of it’s own…

The Federal Housing Administration, which propped up the collapsing housing market last year, acknowledged yesterday that it has drained its cash reserves to dangerously low levels, heightening concerns that it might need a taxpayer bailout.

The agency, which guarantees loans for many first-time homebuyers, could be hit if housing prices lose ground or if a new wave of mortgage defaults, triggered by double-digit unemployment, crashes into the market in the coming months.

If the FHA runs into financial trouble, it could make it more difficult for borrowers to get loans, particularly first-time buyers.

Housing Secretary Shaun Donovan tried to allay fears at a news conference saying his agency should remain solvent under “most economic scenarios,’’ but that “it is absolutely critical that going forward, we build that cushion back up,’’

All of this seems to be clearly signaling that not only has the stimulus failed to create jobs but has failed to provide the recovery infrastructure needed for sustained growth and jobs creation. It Little wonder why critics are claiming the administration is looking at a the possibility of a second stimulus.

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