Why the Obama stimulus failed

Conn Carroll:

When the President first began selling his stimulus plan to the American people in November 2008, he promised it would create 2.5 million jobs. But as employment fell at the end of 2008, President-elect Obama increased his employment promise by one million to 3.5 millions jobs created. At the time, employment stood at about 135.1 million. Using these two data points, one can objectively establish the Obama jobs target for December 2010 at 138.6 million. Fast forward to July 2010 and the latest jobs report shows total U.S. employment at almost 130.5 million. This means President Obama’s stimulus has failed to meet its own standard for success by 7.4 million jobs.

Why has the President’s $862 billion stimulus failed by 7.4 million jobs? Because government spending does not stimulate economic growth. All it does is move resources away from one sector of the economy to another. And government has a horrible track record at efficiently allocating resources. All that really happens is that, on net, jobs get destroyed in the transfer process.