Government Stimulus Vs Private Jobs

Using alleged Keynesian estimates, the government-sponsored stimulus was supposed to create 5 million jobs. This was estimated at the time to be $1.50 of economic activity for every $1 spent by the government.

But that estimate never considered the economic costs of borrowing or higher taxes. The Obama stimulus plan to create 5 million jobs actually resulted in a loss of 3 million jobs instead.

An often misunderstood lesson: Government spending crowds out private spending with its added disadvantage of having zero multipliers.