OK, these tierms are flying around like drunk pigeons lately, and it’s Definition Time.
What makes a given program waste as opposed to stimulus?
And vice versa, naturally.
How are we to tell the difference?
First of all, I tend to be very dubious about whether any “stimulus” ever is. While I’m not saying government bailouts and stimuli never work, their record is dubious. They should be treated with a certain skepticism. When they are used, they ought to look first at what the root problem of the today is, and when it will probably go away.
Now, while I normally tend to favor government money being spent on infrastructure, that has to be spent on really useful infrastructure. During Japan’s Lost Decade, they borrowed and spent on a massive scale. And much, maybe most, of that went nowhere. Building bridges and roads is nice, but only if people need them. Spending the money is easy, but there’s a huge opportunity cost to it. That has to be taken into account.
Edit: striesk me I didn’t answer you very well in the direct sense. I dn’t think much of stimulus, but money is being wasted if it is not being used to address the fundamental needs which only government can adequately provide.
It is a waste if it goes to another state or to a cause that you do not like.
It is a stimulus if it goes to your personal industry, your supportors, or your state.
Consider this the new version of “one man’s rebel is another man’s freedom fighter” meme.
There are some tax credits in the bill for Hollywood. I am sure that some folks out of work in Kansas who think that Tom Cruise should not get a dime, and instead the cash should flow to the local trains, farms and cattlemen. However, if you understand Hollywood and how many jobs depend on movies getting made - you might consider some tax credits or breaks to studios to be a great thing. The fact that the Hollywood Left gave Obama a lot of support has NOTHING to do with it. Really. Truly. I would also venture to guess that the few members of the Hollywood Right will be happy to take advantage of the tax deals (If Mel Gibson’s Icon turns down the cash - let me know).
What really helps? We don’t really know. Economists have been studying monetary policy for years, and have spent little work on fiscal policy.
It’s certainly a valid concern. A decent article about exactly this was in the NYTimes a few days ago.
I will hold on to my opinion for now, but:
Now the reason why I’m holding it is that I have seen reports that the Republicans are fighting to reduce the Education funding in the bill, but I need more evidence to see if that is the case and then I will start wondering why in heck they think that was/is a good idea.
Truth be told it can only be answered in retrospect and probably not even then.
Here’s another article about it, this one from The Economist
To qualify as possible stimulus it needs to get money flowing quickly and/or result in longer term productivity gains. If it does neither then it is waste fro this POV any way.
Most recessions last less than a year, and so often by the time they are recognized it is too late to do anything. This one is over a year old already and getting worse. True there are some things that are going to take a while but others, like extending unemployment benefits, are immediate. Aid to the states is immediate, especially if they prevent layoffs by the states of government workers, which I think everyone will agree is not the best way of dealing with a recession.
The Republicans in Arizona just cut more education funding, (on a state that is among the last on funding education) it seems that they do not know how to deal with a recession.
I do think that they expected that the Republicans in congress would then cover the difference, but it seems that is not likely now. Meaning that the new Republican Governor and many of the Arizona Republican congress critters have an appointment with the unemployment office coming in 2012.
Because Republicans are anti-education. Their anti-intellectual, anti-science, anti-teacher bias has made them completely anti-education. They don’t like teachers, schools, learning, education, or even libraries.
This is what happens when you create such a poisonously anti-intellectual environment that a low achiever like Dubya can become president. Of course, people like HIM don’t like school, for the same reason I never liked taking Gym.
The difference is, I am not anti-phys-ed. In fact, I wish I’d tried a lot harder.
But Republicans in the last eight years have had to pretend that intelligence not only doesn’t matter, but is more or less guaranteed to be evil. After all, smart people don’t think like us. Must be something wrong with them.
All evidence that I’ve seen suggests that Dubya had a great time at Yale. Drinking, womanizing, getting passing grades while doing no work because he’s the son of one the most powerful men in the world–what’s not to like? I’m willing to bet that he enjoyed it a lot more than he enjoyed the presidency.
Getting back to the real topic, I believe that the basic idea of a stimulus is bogus. Suppose the government gives out a dollar. On the positive side, there’s now one more dollar in the economy, so the GDP goes up by one dollar. On the negative side, the national debt goes up by one dollar. Hence the American people will have to pay that one dollar at some point, plus interest. Where’s the stimulus?
It may be argued that if the government spends the dollar on a bridge or a school, the country will earn much more than a dollar as a result. But if that’s the case, it’s true regardless of the state of the economy. Hence there’s no need to put in a bill labeled “stimulus”. Instead, it should be presented as an intelligent investment in infrastructure or education.
The problem with stimulus is that just about anything can be counted as a stimulus. Hence politicians can cram whatever projects they want into a stimulus package, without having to justify them as good investments. Economists and the media will assist by saying that it doesn’t really matter what goes in the stimulus package, as long as it gets passed quickly. That’s a recipe for wasteful spending, pork, and corruption.
I don’t think that they oppose it because Hollywood is liberal, I think they oppose it because, on the face of it, Hollywood is an incredibly wasteful industry, which generates a great deal of wealth. When you think of the money a mediocre movie can rake in, its hard to understand why they so desperately need a tax break.
The Democrats in PA are doing (and thinking) the exact same thing. Most states are feeling the pinch, and most states, unlike the federal gov., cannot run a deficit:
“The vast majority of states cannot run a deficit or borrow to cover their operating expenditures. As a result, states have three primary actions they can take during a fiscal crisis: they can draw down available reserves, they can cut expenditures, or they can raise taxes.” Cite
Here is some more: “At least 46 states faced or are facing shortfalls in their budgets for this and/or next year, and severe fiscal problems are highly likely to continue into the following year as well. Combined budget gaps for the remainder of this fiscal year and state fiscal years 2010 and 2011 are estimated to total more than $350 billion.”
Infrastructure repair is not a waste. It has been neglected for too long. It is real work that has to be done. I would rather do it now that wait for bridges to collapse . There are some levees around New Orleans that could use some work too.
I think the entire system is, quite frankly, broken.
First, I don’t believe in the idea of a “stimulus” It’s a steaming load of crapola that will do nothing for the economy that a dozen years of efficient management would not have done. You can make a lot of money with a little money and a lot of time. The idea that spending billions of our dollars that the government has already taken (or will take) from us and that we’re going to have to work to get back makes as much sense as giving your TV to your employer and then working to get it back. In fact, Bush had the right idea about tax cuts. Cut deep, cut now and keep cutting. Not only that, force radical efficiencies in government. Trim to the bleeding edges and then trim some more. Get the money to the people and as soon as they feel comfortable again, they’ll spend it. That’s not how ANY politician of any stripe views your money though. The Dems want to hand it to the historically downtrodden and the GOP wants to hand it to the military contractors. In either case, your money goes.
Second, we’re not IN a recession, we’re in or approaching a depression. It may not be by the academic definition, but rest assured, we’re in one. If we have one more year of down economic activity, then maybe SOMEONE will see it, but from the sidelines, it looks like we’re smack in the middle of it. We need to shore up our own industry, force companies by rule and regulation to bring their labor forces back here or face tarriffs or fines. I don’t want to sound jingoistic, but America has shored up the economies of the world for decades. Now, we’re in trouble. Big.
Third, to address the OP the difference between stimulus and waste is votes. If it gets me votes, I’ll call it a stimulus, if it costs the other guy votes, I’ll call it waste and you’ll believe me, because I’m good at making you believe.
The end result is that whether it’s social programs or military-industrial programs, there’s someone waiting to pick your pocket. Now that the economy is up to its’ nose with the water rising, SOMEONE has to do SOMETHING, and even Lincoln believed that this type of thing would work, but the way this bill is set out, Lincoln would puke in his soup. What we’re seeing isn’t true stimulus, it’s bacon-wrapped pork.
I am totally stunned by the cut in aid to the states. Grandstanding, obfuscation, obstruction, sure, that’s all part of the game, and the game is played dirty. I accept that. But refusing to send money to the states is cutting of your own dick to piss off your wife.
We are going to have to help them, period, full stop. There is no option on this, and I totally cannot grasp what they are thinking here. I’ve read news report of *Republican governors pleading on bended knee. Shit, if they found some mechanism to help only the Pubbie states, maybe I could come to grips with that, rationally. But this is nuts. Totally nuts. Don’t help them now, when they are merely desperate, then when? They’re going to come back, they have to, and the situation will be much, much worse. And the cost? * Oy.
Anybody get this? Bueller? Boehner? Boehner?
The Pubbies appear to be picking items to filibuster over simply at random, as the beginning of their still-unstrategized “brand restoration” effort. School construction is “waste”? Flu shots?
Rachel Maddow had a great segment on her show last week comparing the turnaround difference on taxcuts, infrastructure, and foodstamp investments. Foodstamps were, by far, the best investment, netting $1.73 for every dollar spent. Ifrastructure turned in $1.59 on the dollar. Taxcuts were $1.03(permanent) and $1.29(temporary).
I believe this is the correct youtube link, but at work I can’t double check it.
Here is a report done by Mark Zandi where he cites the same numbers(page 4/warning:PDF)
Don’t expect us to make sense out of something which had no sense to it to begin with.
You’re really an Obama voter? I guess it takes all types. Sorry, it has been amply demonstrated that tax cuts are not an efficient way to stimulate the economy. We need to get people to work, and as long as they are out of work they are not going to be comfortable spending anything. As long as they are worried about getting thrown out of work, they won’t be spending either.
And you’re wrong about who either side wants to give most of the money to.
Even if this were a good idea, which it isn’t, it would take years to execute, years we don’t have. Much as I would emotionally be in favor of this, practically it would either raise prices, make whole companies move offshore, or both. As for tariffs, they tried that during the last Depression and it didn’t work too well.
Hiring people for earthquake retrofitting, or road repair, or for fixing bridges so they won’t fall down is waste?
Lincoln? Was he a Keynesian? I doubt he had to worry too much about stuff like this, he ran the big stimulus package called the Civil War. I’ve never seen anyone consider Lincoln as a source of economic expertise before, interesting, even for someone living in Illinois.