This is a rush transcript from "Your World With Neil Cavuto," October 30, 2009. This copy may not be in its final form and may be updated.

STUART VARNEY, GUEST HOST: Halloween eve, and the markets looking pretty darn scary, the Dow diving more than 200 points at the close. Consumers are not spending. But the White House says stimulus is working. Is it?

Welcome, everyone. I am Stuart Varney, in for Neil Cavuto. This is "Your World."

One million jobs, that is what the government says stimulus created or saved. With just $173 billion spent so far, that translates into more than $170,000 per job created or saved, all of this as the jobless rate continues to climb, more than 2.7 million jobs lost since the stimulus bill was signed.

Now, Republicans say the White House is living in a fantasy world.

My next guest says they are the ones in the fantasy world.

Former Congressman Martin Frost joins me now.

Sir, the AP, the Associated Press, yesterday went out and proved that initial claims of job creation for the stimulus package were exaggerated. I put it to you, sir, you cannot prove that the stimulus bill has created or saved a million jobs.

MARTIN FROST (D), FORMER U.S. CONGRESSMAN: Well, Stuart, when the Republicans are in control, and they released economic data, I never challenged the economic data that the Bush White House put out.

I may have questioned their policies, whether the policies were wise or not, but I don't know anything is to be accomplished by saying, oh, well, it didn't really create a million jobs. Maybe it created 750,000 jobs.

VARNEY: Well, you could get at the truth, couldn't you?

FROST: The point is, is we had a 3.5 — we had a 3.5 — well, we had a 3.5 percent increase in GNP in the last quarter. If you had not passed the stimulus, that would not have occurred.

And everybody agrees with that.

VARNEY: But this is a claim, this is a specific claim that a million jobs were created or saved by the stimulus plan. That is a very specific claim. I don't think you can prove it. It's fuzzy math, isn't it?

(CROSSTALK)

FROST: Stuart, I — Stuart, I have read the information. There are 600,000 jobs in the public sector.

VARNEY: Yes.

FROST: And they are extrapolating from that.

Listen, as I said, I never challenged what the Bush White House put out on how the economy was doing.

VARNEY: But...

FROST: I think it is unwise to go down this road. The question is whether we should have the stimulus...

(CROSSTALK)

VARNEY: But you just can't put out a number and expect you to accept it.

(CROSSTALK)

FROST: Stuart...

VARNEY: Part — the part of the report put out by the White House, part of the claim for million jobs is that you have spent $288 billion — that was tax cuts — and that created 350,000 jobs.

Now, that is — that is really fuzzy math, because you can't prove that you created 350,000 jobs or that you saved them by cutting taxes. You can't prove it.

FROST: Stuart, why did the GNP go up by 3.5 percent in the last quarter?

VARNEY: It wasn't because of false claims of a million jobs created.

(CROSSTALK)

FROST: Obviously, the stimulus helped. And other things that Congress and the government did, the new home tax credit, the $8,000, helped. And Congress is going to extend that next week. And that is the right thing to do.

The alternative is to sit by and do nothing. That's what the Republicans would do. Don't spend any money. Don't put any money in the economy. It will all figure itself out. It will all right itself.

(CROSSTALK)

VARNEY: This is not Republicans vs. Democrats. It is not right vs. left. It is a specific claim of a million jobs created or saved.

What the White House did was to accept at face value 50,000 project reports around the country. They accepted the numbers of jobs created or saved at face value. All of those project reports have a vested interest in optimism. It is a dubious claim, which has to be challenged.

FROST: Well, Stuart, what would you say; let's don't create any new jobs; let's don't put any money into the economy?

VARNEY: No, I'm not saying that. I'm saying, get at the truth.

(CROSSTALK)

FROST: That is not a reasonable proposition to take.

(CROSSTALK)

VARNEY: No. What I'm saying is, you have spent — you are going to spend $787 billion, a vast amount of money. You should not make exaggerated claims about that kind of spending, when the AP says, objectively, and proves that the initial claims were generously exaggerated.

FROST: I don't — I don't — I don't think anybody has proved that.

And, secondly, only a small portion of that stimulus money has been spent. You know that.

VARNEY: Yes.

FROST: A lot of the money will be spent next year.

VARNEY: Yes.

FROST: And it is exactly the right thing for the government to be doing, rather than just sitting on the sidelines.

VARNEY: So, are you claiming — are you claiming, then, that, with only a fraction of the stimulus money spent, you have indeed created or saved a million jobs? Is that the claim?

FROST: Stuart, what — what I am saying is that I am not an economist. I am a politician.

When I was in office during the Bush administration, and they made similar claims, I accepted the numbers that the Bush administration put out, regardless of whether I agreed with the policy or not.

I think you should be arguing whether the policy makes sense. Does it make as much sense — sense to spend money on a stimulus stimulating the economy? Should the government play a role?

Not trying to — nitpicks on whether it is this number of jobs or that number of jobs. This should be a policy discussion.

VARNEY: With respect, Congressman...

FROST: And the government has a role to play to bring this economy back.

VARNEY: You're right, sir. But, with respect, you don't nitpick about $787 billion and a claim of a million jobs created or saved. You don't nitpick.

FROST: Well, first of all, not all that money has — only a fraction of that money has been spent.

VARNEY: Yes. Yes.

FROST: And you know that.

VARNEY: Hundreds of billions of dollars. We don't nitpick about hundreds of billions of dollars.

Congressman Martin Frost, appreciate it. I thank you very much for coming by, sir.

FROST: Thank you.

VARNEY: Good stuff.

FROST: Thank you.

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