Everything about reality in Washington seems to be utterly detached from reality anymore. This joke graph is a perfect example!And by the way, the payoff to Mark Penn can't be from Hilary. He cost her the election! So the cynic in me thinks the money is Obama's payoff to Mark for costing Hilary the election. Think about it. Got a better explanation?
So, the posting of this graph leaves your intentions a little unclear. Are you saying that the estimates were created by politicians, not economists that work for the White House? Were the estimates of future unemployment without the stimulus considered out of line with other mainstream estimates? Are you asserting that the stimulus caused increased unemployment? Or, could it be that the recession was worse than originally anticipated?
I have to agree with Brian and add that without any additional information, one doesn't know what the units actually are supposed to be; trusting the source isn't playing funny with two different scales.
I remember when White House staff came out with their projections, they were hammered by the likes of Krugman and Reich for being way too low.
@Josh -- hahahaa -- yes, indeed.@Brian and Umlaud -- Those figures are accurate (in fact, I think we're above 10% now), and my point is that the stimulus did NOT work. I understand that it may have been worse without the stimulus, but I think not. As drtaylor has said to me on emails "nobody's going to use a stimulus to hire if there's no demand!" Read more of my views here and here
You gotta be kidding me. Every private economic forecasting firm--even the republican run firms--agrees that the stimulus prevented a much worse situation. The forecast numbers in the chart were Christina Roemers best guess from December (before they took office) and reality was worse. Seriously, how do you get off calling yourself an economist and denying that multipliers exist? How do you deny that the government buying things and services is not stimulating in a world where Y=C+I+G?Gimme a break. The comment about Krugman was right--he wanted the stimulus to be 50% bigger, and he was right. But the "moderates" refused to spend more than 800B. And the GOP--with an eye toward torpedoing Obama instead of helping the economy voted against it. (Not to be too partisan, but the GOP argues for weapons programs on the basis that they stimulate jobs, but argues against other government spending saying they do not stimulate...WTF.
Actually, I'm interested in the specific cases where stimulus has worked.ARRA has been very slow and small in its impact - only half of the money has actually been spent. However, a stimulus to major financial institutions has been so successful that the major recipients went from their worst losses to some of their highest bonuses in a matter of months. It has had very little impact on the jobs market, consumer confidence, monetary circulation, or the economy as a whole, so this supply-side type of stimulus was a bust, and its subsequent moral hazard downward pressure on future government expenditures will exacerbate future downturns, including the one we are peering over right now.The one that did work, that showed an immediate blip on jobs and confidence, and actually helped companies keep jobs, if for a little while longer, was Cash 4 Clunkers. Everybody laughs at it, for a number of reasons, but that money was spent and circulated FAST, and it provided enough confidence to boost production for a time.In fact, C4C was probably the closest thing we've come to a WWII-style stimulus in this recession. As far as deficit spending, I'd love to see gov't. borrowing threatening to crowd out private borrowing - that would mean we actually have robust demand for private lending. We don't, and we don't for two HUGE reasons: 1) consumer demand is way down, so businesses aren't looking to borrow at rates they would normally need; 2) future forecasts show depressed consumer demand for years, so why would banks want to invest in a risky and low- or zero-inflation climate? Better to stay liquid and tight, than risk. And, it's prudent for individuals & companies to behave this way in a down market. Thus, the need for the less efficient government spending to take up the slack.
"Seriously, how do you get off calling yourself an economist and denying that multipliers exist?"Digging holes and filling them in do "stimulate" but they do not "produce."My main critique is that there were better, cheaper ways to respond to the crisis.Love,A Political-Economist
Troller, man. Don't bite, he'll reel you in.
Trolls. I eat them for breakfast, not lunch. (Their tiny brains are not very filling...):D
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