Worked a charm in the 40's. It was called the "war effort" then, of course. Which, provided a convenient "frame" to foil the efforts of those prevented it from working in the 30's.
War efforts aren't really Keynesian in the sense that it's not pump priming or anything like that - a war is a special case where the unemployed get drafted and other people fill holes. It's not really fixing a perceived lack of private demand as we understand it.
Actually, the CBO recently released a report showing that there were minor positive results. Very minor.
As I noted below, the CBO does not do independent analysis - they just run the numbers using the suggestions provided to them by the legislators. So when they say it made positive results, it's because the multipliers given to the CBO demand as such.
Thus it is not out of the realm of possibility to think a larger stimulus would have worked better.
Only if you buy the multipliers, though - we shouldn't have seen job losses of this magnitude with the stimulus - the projections were that we'd be in a better employment place doing nothing than we are right now with the stimulus. It's way, way outside the realm of possibility at this poiont.
On the other hand, I haven't seen any indications that it's made anything worse. But then, I do not consider politically motivated statements from orange mid-western politicians or possible human-turtle hybrids to be valid indicators. I guess that reflects my bias.
Clearly, it does. Look at unemployment. Look at home sales. Look at how companies have been reacting and continue to react. The evidence is overwhelming that it is making things worse, which is no surprise - this sort of stimulus made things worse in the 1930s and in 1990s Japan, too.
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Date: 25/8/10 16:51 (UTC)War efforts aren't really Keynesian in the sense that it's not pump priming or anything like that - a war is a special case where the unemployed get drafted and other people fill holes. It's not really fixing a perceived lack of private demand as we understand it.
Actually, the CBO recently released a report showing that there were minor positive results. Very minor.
As I noted below, the CBO does not do independent analysis - they just run the numbers using the suggestions provided to them by the legislators. So when they say it made positive results, it's because the multipliers given to the CBO demand as such.
Thus it is not out of the realm of possibility to think a larger stimulus would have worked better.
Only if you buy the multipliers, though - we shouldn't have seen job losses of this magnitude with the stimulus - the projections were that we'd be in a better employment place doing nothing than we are right now with the stimulus. It's way, way outside the realm of possibility at this poiont.
On the other hand, I haven't seen any indications that it's made anything worse. But then, I do not consider politically motivated statements from orange mid-western politicians or possible human-turtle hybrids to be valid indicators. I guess that reflects my bias.
Clearly, it does. Look at unemployment. Look at home sales. Look at how companies have been reacting and continue to react. The evidence is overwhelming that it is making things worse, which is no surprise - this sort of stimulus made things worse in the 1930s and in 1990s Japan, too.