This is the Cato Daily Podcast for Thursday, November 19th, 2009.

I'm Caleb Brown.

If the Obama administration were serious about job creation with the stimulus plan, why weren't dollars targeted at

states with higher unemployment.

Eronique de Rugee is a senior research fellow with the Mercato Center and an adjunct

scholar of the Cato Institute. She says the relationship between stimulus spending and the

mythical saved or created jobs is non-existent.

The idea behind the stimulus plan was the government would spend money, would give money to agencies who

would then give money to contractors who would then hire people to do jobs and

that would trigger first job creation and second economic growth.

How was that money distributed among states?

Well it's not really clear.

I mean it was probably a political and random formula that was used

but what I think or the way I think the money should have been distributed if the

theory behind you know government spending is able to create jobs was correct

is that we should have been states with high unemployment receiving more stimulus money and if in fact government spending could

trigger job creation we should have seen in these states that had received more money

we should have seen more job created that's the way we should have done it and in

effect when we look at the data, the President Obama's own data that's available on their

website on the website recovery.gov, this is absolutely not how it works.

Is it your assertion then that it should be easier to create a job with the same amount

of money in a state with relatively higher unemployment?

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