Wednesday, 11 February 2009

Price of a Senate seat, revisited

In December I calculated the price of a US Senate seat at conservatively $1 billion.

I'll disregard for now the $2.5 trillion secondary effect of the new Tim Geithner bank rescue plan, and whether we might therefore revise the value of the marginal seat upwards to $5-10 billion.

But Brad DeLong has worked it out in a different way. The price of three Republican Senators is 600,000 jobs. So let's crunch the numbers.

At 200,000 jobs per senator, and one senator per billion dollars, it's easy to work out the price per job: $5,000. This compares extremely well to the $280,000 per job estimated by Greg Mankiw.

Even on the enhanced valuation of $5-10 billion per senator, we are still only looking at $25-50,000 per job. Perhaps the stimulus plan can be restructured to focus on buying the seats of Republican senators and converting them into jobs. Obama's goal of 4 million jobs could be achieved for as little as $20 billion, by simply buying up twenty of the remaining Republican senators.

We leave open the question of whether Democratic senators are worth more or less than Republicans.

p.s. server logs show several visits to the above page from both the US Senate and the House of Representatives. My recent posting on a stimulus for bloggers also received visits from the House, while the Senate clicked on my analysis of the Buy American clause. Perhaps policymakers are taking these important blog postings seriously. At last, some sanity prevails in the halls of government.

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