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A Project of The Annenberg Public Policy Center

Another Black Hole

A secretive, Republican-leaning group has spent an estimated $3 million on a TV ad making the false claim that government spending is "not creating jobs." The ad first appeared Sept. 7 and was still running nearly a month later. The ad shows a man in a business suit digging an ever-deeper hole — a visual metaphor for the nation’s ever-expanding debt. It could also be a metaphor for Public Notice, the sponsor of the ad and yet another group whose finances are also something of a black hole.

Public Notice was formed this year by a former press spokeswoman for several Republicans. The group has spent $3 million so far on the ad, which has been running on national networks and national cable outlets, according to the Campaign Media Analysis Group, a unit of Kantar Media. But where the money comes from, and how much more the group intends to spend, is a mystery. "We do not discuss our organization’s finances," the group’s executive director, Gretchen Hamel, told us in a telephone interview.

The ad itself is mostly factual — with one key exception.

  • It says: "We’re 13 trillion in debt," which is an understatement. The total is currently above $13.6 trillion, counting both the debt held by the public and all the money that the government owes to itself, including the Social Security trust fund.
  • It says that the debt is "almost the size of the nation’s economy," which is close enough. The nation’s economy, as measured by gross domestic product, is projected to be $14.8 trillion this year, and $15.3 trillion next year, according to the most recent economic forecast by the nonpartisan Congressional Budget Office.
  • The ad says Washington’s spending is "unsustainable," a judgment that can hardly be disputed, given that the federal government was spending more than $3 for every $2 that it took in during the fiscal year that just ended, according to CBO’s most recent monthly budget review. (Final figures for the fiscal year are still being tabulated.)

Where the ad goes wrong is its claim that spending "is not creating jobs," a false assertion echoed in several Republican campaign commercials. As we noted in our Sept. 27 article, "Did the Stimulus Create Jobs?", the stimulus package increased employment by between 1.4 million and 3.3 million, according to CBO’s estimate. Some independent economists put the total even higher.

The group attempts to back up its claim by citing the fact that the total number of jobs is lower and the unemployment rate is higher now than before the stimulus spending began. That’s true enough, but proves nothing about how much worse things would have been without the stimulus spending. It’s accurate to say that government spending hasn’t created enough jobs to offset those that have been lost, but simply wrong to claim that it hasn’t created any.

A Financial Black Hole

Hamel would say nothing about who gives to her organization, or even whether or not it accepts corporate funding. The group says on its websites that it is organized as a Limited Liability Company with tax-exempt status under section 501(c)(4) of the Internal Revenue Code. That leaves it legally free to accept such funds, without disclosing its donors publicly.

Hamel says of Public Notice, "[We] are not a ‘political group.’ We are an education advocacy group." Her ad, however, calls for viewers to "find out how together we can hold Congress accountable." Not that there’s anything wrong with being a political group.

Before forming Public Notice, Hamel had a long history of working for Republicans. She was a press assistant for former GOP Rep. J.C. Watts of Oklahoma, then press secretary to GOP Rep. John Carter of Texas and later for the House Republican Conference. She was deputy assistant U.S. trade representative during the final years of the Bush administration.