Stimulus? Still a failure.

[badlydrawnjeff.livejournal.com]

The failure of the stimulus isn't exactly news, and hasn't been for some time. Thankfully, more and more people are getting on board.

For instance, it looks like we might not have needed it to begin with. Granted, since stimulus of this nature doesn't work, we never need it, but the justification for it isn't so strong anymore:

"We had to hit the ground running and do everything we could to prevent a second Great Depression," Obama told supporters last week.

...

IBD reviewed records of economic forecasts made just before Obama signed the stimulus bill into law, as well as economic data and monthly stimulus spending data from around that time, and reviews of the stimulus bill itself.

The conclusion is that in claiming to have staved off a Depression, the White House and its supporters seem to be engaging in a bit of historical revisionism.

...

The argument is often made that the recession turned out to be far worse than anyone knew at the time. But various indicators show that the economy had pretty much hit bottom at the end of 2008 — a month before President Obama took office.

Stanford's John Taylor showed us that tax credits and directed spending was fairly worthless:

Individuals and families largely saved the transfers and tax rebates. The federal government increased purchases, but by only an immaterial amount. State and local governments used the stimulus grants to reduce their net borrowing (largely by acquiring more financial assets) rather than to increase expenditures, and they shifted expenditures away from purchases toward transfers.

Some argue that the economy would have been worse off without these stimulus packages, but the results do not support that view.

Even Harvard's Robert Barro is on board to an extent. While he has yet to come around on the fact that stimulus has not ever been shown to work, he's at least noting that the merits of spending need to be more important than the stimulating impact:

"In the long run you have got to pay for it. The medium and long-run effect is definitely negative. You can't just keep borrowing forever. Eventually taxes are going to be higher, and that has a negative effect," he said.

"The lesson is you want government spending only if the programmes are really worth it in terms of the usual rate of return calculations. The usual kind of calculation, not some Keynesian thing. The fact that it really is worth it to have highways and education. Classic public finance, that's not macroeconomics."

With murmurings that we may need a second stimulus, the question remains as to why we'd pursue such a thing given the track record of the first. At this point, if you're still a proponent of Keynesian-style stimulus, why? What will it take to convince you that it will not succeed?

Comments

[badlydrawnjeff.livejournal.com]

were that it wasn't anywhere near big enough

The data disagrees. What would have been big enough according to you?

it wasn't administered very well

What do you mean?

and it contained too many tax cuts for rich people and corporations.

It didn't have any tax cuts for rich people, or any people. Plenty of tax credits, though.

[xforge.livejournal.com]

1) If you're only getting your "data" from a bunch of Austrians and the current batch of Republicans in Congress, of course the "data disagrees."

2) I mean it wasn't administered very well. It took months and months to get any of the money allocated. Money couldn't be allocated until Republican legislators had a chance to go home and present the stimulus as giant novelty checks in front of news cameras. The last of it is actually still sitting in the banks unspent.

3) Refusing revenue is refusing revenue.

[xforge.livejournal.com]

Well of course tax cuts and credits cost less. But giving tax breaks to the megarich and to huge corporations does absolutely nothing to help anyone but the megarich and the shareholders and officers of the huge corporations, whereas sending money to build a new bridge to replace one that's falling down helps tons of people. The same money would help even MORE people if it went into public transportation and health care but don't EVEN get me started on THAT shit.

[badlydrawnjeff.livejournal.com]

1) So I sourced a bunch of Republicans and Austrians in the OP?

2) So it was a government program.

3) But tax credits are not tax cuts.

[underlankers.livejournal.com]

There were tax cuts in 2009 and in 2010, and also in 2011. At least in my world. What world are you posting from? Bizarro-Earth?

[xforge.livejournal.com]

I think the whole group is well aware that Jeffy lives in a very, very strange alternate dimension.

[underlankers.livejournal.com]

Heh. If I hadn't believed that, the discussions about whether or not Colin Powell's UN speech happened would have convinced me.

[badlydrawnjeff.livejournal.com]

No, there were tax credits in 2009, a payroll tax cut in 2010 (which was also accompanied, I believe, by an estate tax increase), and nothing so far in 2011.

[underlankers.livejournal.com]

Ah, so Obama did pass a tax cut. Then you admit you lied then? Thanks for conceding the argument.

[badlydrawnjeff.livejournal.com]

When did I say he hadn't? I said the stimulus had no tax cuts. That remains accurate.

[underlankers.livejournal.com]

Here:

Remember: there were no tax cuts.

Was this BadlydrawnJeff1 or Badlydrawnjeff2 who typed this?

[badlydrawnjeff.livejournal.com]

Was the tax extension last year part of the stimulus? Because this (http://talk-politics.livejournal.com/1074883.html?thread=85840835#t85840835) and this (http://talk-politics.livejournal.com/1074883.html?thread=85840067#t85840067) are the only comments I've made regarding tax cuts, and both were a discussion of the stimulus.

So practice what you preach and admit that you're wrong.

[underlankers.livejournal.com]

I do and have quite recently. I am not wrong here, Mr. "I didn't mean X when I said X."

[badlydrawnjeff.livejournal.com]

You are wrong. Read the threads again. I await your apology.

[underlankers.livejournal.com]

I have read the threads. I know a lie when I see one. I've already asked you for yours and as it is not forthcoming, I shall not slam my head against the brick wall of someone else's willful lies.

[badlydrawnjeff.livejournal.com]

So you're not actually willing to admit you're wrong. I'll file that away for later.

For the record, when I'm wrong, I admit it (http://talk-politics.livejournal.com/974227.html?thread=75939475#t75939475).

[underlankers.livejournal.com]

For the record, so do I, twice in one set of threads in fact:

http://talk-politics.livejournal.com/1072055.html?thread=85526967#t85526967

http://talk-politics.livejournal.com/1072055.html?thread=85533879#t85533879

So none of this about how I cannot say it either.

[badlydrawnjeff.livejournal.com]

Excellent. Now do so here.

[underlankers.livejournal.com]

You first, as it was you who's claiming that when you said blue was green you meant that blue was blue.

[badlydrawnjeff.livejournal.com]

I've already linked you numerous times to the context. It's up to you now to accept it.

[underlankers.livejournal.com]

The Heritage Foundation seems to have no problem admitting tax credits are tax cuts. Why do you hate America and support Stalinism?

http://blog.heritage.org/2009/02/12/when-a-tax-cut-isnt-a-tax-cut/