McArdle makes a decent case to be cautious about fiscal stimulus here:
Starts to pick up at the 3 min mark.
Archive for the 'Fiscal Stimulus' Category
Dec7th2011
Megan McArdle On Fiscal Stimulus
Published by in Economics, Fiscal Stimulus and ModernPolitics. 0 CommentsJul11th2011
Setting The Record Straight On Herbert Hoover
Published by in Economics, Fiscal Stimulus and Myths. 0 CommentsMegan McArdle writes:
Hoover did not tighten up on spending. According to the historical tables of the Office of Management and Budget, spending in 1929 was $3.1 billion, up from $2.9 billion the year before. In 1930 it was $3.3 billion. In 1931, Hoover raised spending to $3.6 billion. And in 1932, […]
Jul1st2011
“… there is no hard and fast distinction between cyclical and structural unemployment. For instance, if structural unemployment in American has risen closer to European levels, it may be partly due to the decision to extend unemployment insurance from 26 weeks to 99 weeks, and to increase the minimum wage by over 40% right before […]
Feb18th2011
“When people like Paul Krugman say that almost $900 billion in stimulus didn’t work because it wasn’t big enough, you have to wonder if an adequate Keynesian stimulus is even possible. Could any government anywhere borrow 15% of GDP or more to spend on temporary measures with the blessing of their […]
Dec2nd2010
It looks like it’s the union auto industry bailout that was the costliest:
The much-maligned TARP program will cost taxpayers only $25 billion according to the latest estimates from the Congressional Budget Office. That’s substantially less than the $66 billion CBO estimated back in August or the $113 billion that the Office […]
Jul8th2010
“Wading through the online debates, I note that opinions on stimulus are nearly 100% correlated with the composition of that stimulus, and the opinionator’s prior view of that activity. So when Democrats are in power and stimulus is mostly spending, liberals think that the stimulus is an issue of fierce moral […]
Jul7th2010
The Next Fiscal Stimulus
Published by in Economics, Fiscal Stimulus, ModernPolitics and Taxes. 1 CommentHarvard economist Ed Glaeser gives his recommendation:
But if America does embrace another stimulus round, we should limit the government’s role to being the big borrower rather than the big spender. Cutting payroll taxes for lower-income workers who have just been unemployed is an example of stimulus through borrowing, rather than spending. […]
Mar9th2010
“Last week, I briefly discussed the geographic distribution of Recovery Act funds. The figure shows the relationship between per capita Recovery Act grants awarded and unemployment across states, which shows that stimulus aid was not particularly well matched with need…On average, for every extra percentage point of the labor force that is unemployed, a […]
Feb18th2010
Fiscal Stimulus And Hypocrisy
Published by in Economics, Fiscal Stimulus and ModernPolitics. 1 CommentMany Democrats, including Obama, have criticized Republicans for both opposing the Stimulus bill and helping to direct some of that stimulus money to their districts. They claim its hypocrisy. Greg Mankiw argues otherwise:
It seems perfectly reasonable to believe (1) that increasing government spending is not the best way to promote economic growth in a depressed […]
Nov30th2009
More On Tax Cuts Vs Fiscal Stimulus
Published by in Economics, Fiscal Stimulus, ModernPolitics and Taxes. 0 CommentsFrom Harvard’s Alberto Alesina and Silvia Ardagna:
Large changes in fiscal policy: taxes versus spending
We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase […]
Oct5th2009
“It seems to me that there are two ways of thinking about how monetary policy would react to fiscal stimulus. One approach would be to ask: “What is the optimal Fed response to fiscal stimulus?” And the answer to that question is rather obvious; the Fed should act in such a way as to completely […]
Sep24th2009
Tax Cuts Vs Fiscal Stimulus
Published by in Economics, Fiscal Stimulus, ModernPolitics and Taxes. 6 CommentsEven more proof that tax cuts are better at stimulating the economy than fiscal stimulus. Bruce Bartlett describes the recent research by Harvard economist Robert Barro:
Harvard economist Robert Barro is out with a new paper that undoubtedly will get a lot of attention from conservatives. First, he finds that the multiplier effect from government purchases is well […]
Sep21st2009
According to recent economic data, zero:
Once you allow for a significant role of forward-looking behaviour by households and firms, there is no multiplier. The expectation of future tax increases, or rising government debt and future interest rate increases leads to a reduction in private consumption and investment spending. This holds in particular for the three […]
Jul27th2009
Limited Governments Best Friend: The CBO
Published by in (modern day) Liberalism, Economics, Fiscal Stimulus, General, HealthCare, ModernPolitics and Personal. 2 CommentsRemember the Democrats claim that by empowering a new panel (the Independent Medicare Advisory Council) to recommend future spending reductions we could save several billions of dollars in healthcare costs? If this was before the creation of the CBO (1974, according to Wiki), such claims would be nearly impossible to disprove. Democrats could get away […]
Jun11th2009
“How is a $118 billion structural deficit, $35 billion in Medicare Part D, and a theoretical end to the Iraq presence forcing Barack Obama to spend nearly $1 trillion in 2018? How is it forcing him to spend roughly $650 trillion more than he takes in in 2012?…The problem with the budget deficit is that, […]
May29th2009
More On The Problems With The Stimulus
Published by in Economics, Fiscal Stimulus and ModernPolitics. 0 CommentsEconomist Arnold Kling reports:
Greg Mankiw reports that the yield curve is steep, meaning that long-term interest rates have risen. In my view, this is perfectly rational, and it shows that the short-run effect of the fiscal stimulus is negative, as Jeff Sachs predicted.
This is all based on a Keynesian type of macro analysis. As we […]
