I mentioned Moody’s chief economist Mark Zandi of the “unemployment benefits are really stimulative” last week to point out the ridiculous nature of his claims. Well, Geoff over at Innocent Bystanders took a look at Zandi’s report and finds that – suprise – government spending doesn’t have a multiplicative effect on the economy greater than 1 – even according to Zandi’s own numbers!

According to Blinder & Zandi, we’ve spent $391 billion in stimulus money in “now” dollars, to get a GDP increase of $340 billion (in 2005 dollars), so we lost $51 billion. Lost $51 billion. If you adjust for inflation, it only cost us about $10 billion, but the point is that rather than spending the money in a way that has a big economic multiplier, it’s been spent with a economic multiplier less than 1.

They also tell us that their modeling predicts that the stimulus itself was responsible for 2.5 million jobs. If you simply take that at face value, and divide it into the $391 billion spent thus far, you find that each job cost us more than $150K. Yep – each job over that 18 month period cost us $100K/yr.

Combine that bit of data with the report from Republican Senators Tom Coburn and John McCain about some of the wasteful, non-job-creating items funded by the stimulus and you get an idea why President Obama’s job approval continues to fall.