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]

That I outright linked to the thread is a pretty clear indication I'm willing to own up to what I say. At least on this one you misunderstood me - it's an improvement over what you pulled earlier.

[underlankers.livejournal.com]

Yes, you linked to the thread. I'm curious as to what you meant when you said FDR practiced extreme authoritarianism on par with Stalin's. Stalin murdered his way through Europe from 1928-1953, and his Red Army was as terrorized by the NVKD as the Wehrmacht was by the SS, with as many atrocities to its record as the Wehrmacht had to it. Stalin depended on terror too much for his own good to judge by how he died.

What in the fucking Hell did FDR do to remotely equal any of this in terms of authoritarianism? Social Security? Medicare? The draft?

[badlydrawnjeff.livejournal.com]

What in the fucking Hell did FDR do to remotely equal any of this in terms of authoritarianism? Social Security? Medicare? The draft?

Add those along with imprisoning citizens based on race, price controls, massive works projects, etc. They're similar - not the same, but similar. As I've always said. FDR was not an anti-fascist, he was a fascist along the lines of so many others.

[underlankers.livejournal.com]

No, neither he nor Stalin were fascists. If they had been, no Jews would have survived in Europe. Stalin was a Marxist, and thus his mass murder targeted classes more than ethnicities (there were exceptions, but he expelled as oppose to simply murdering them industrially, not that big a difference but a key one). Stalinism, unlike Nazism, was prudish, its lethality was more concentrated, and it made much better use of its potential as a conquering force.

FDR's Administration was undoubtedly authoritarian in some aspects, but then the USA as a whole has always had that strand in it, whether from slavery or its segregation-and-sharecropping successor.

[underlankers.livejournal.com]

None of which were FDR's fault, I might add.

[badlydrawnjeff.livejournal.com]

No, neither he nor Stalin were fascists.

And we'll never get a consensus on this. You think fascism is about things that it isn't.

[underlankers.livejournal.com]

I think that fascism is about what the fascists said it was about, yes. That puts me in a minority, even where "academics" as Root Fu would define the term are concerned. People have an extraordinary difficulty taking the fascists seriously by contrast to their nemeses. What makes that so is not apparent to me, the Stalinists weren't exactly any more accurate on things.