Was The "Stimulus" Worth It?

[elucidator]

@jtgain

, No matter what happened, it Would Have Been Worse…

Indeed, that is the premise upon which it was based, that things would be worse. Not that things would be great, because they damned sure couldn’t be, given the oozing syphilitic clusterfuck we had to deal with.

Now, I am overall kinda grumpy about a consumerist economy, based on plundering the planet to make loud shiny crap to sell to rubes. I hope, over time, we can do better.

But as it stands now, if the consumer has no money, the machine will stop. And because the rubes are my fellow Americans and predominately human, I can’t be pleased about that, the suffering would be too great and it would offer far too much opportunity of the ambitious and unscrupulous. Not to mention the evil.

So, it must run. To run, the people must have money. Something indecent about being willing to incur a deficit to fight a useless war, but get all squeamish about helping our own people.

Now, I can’t pretend to understand academic economics, I’m a mathtard, and that’s that. So I make my best guess, study what I can, and it seems to be that the Keynes types have got the edge in this argument. Plus Krugman is just cute as the dickens, looks like the chipmunk from Mensa.

If I had the power to make the decision, and I thought that line of thinking was correct and most likely to be effective, then it would be my bound duty to try an implement those stimuli. I expect no less from my President. Or, more correctly, I still expect it despite numerous disappointments.

I fear we have become obsolete, us rubes. Used to be, they employed us to build stuff that we would buy, and they would take their cut. Then it got to be cheaper to build it somewhere else, and then employ someone else to make it, and sell it to us and a whole lot of other people.

And so long as the Dollar Almighty and the Free Market, blessings and peace be upon its name, remain supremely and sublimely omnipotent…it ain’t likely to get much better. They don’t need us anymore. And lifeboats are expensive, if you wanted a place on one, you probably should have made better choices.

[China_Guy]

@Sam_Stone

Anyway, in the other thread we also discussed this paper, which argues that the stimulus either created very few jobs or even cost a lot of jobs, but had the major effect of destroying private sector jobs in favor of saving public sector jobs. In other words, it permanently transferred a chunk of the workforce from the private sector to the government.

Sam, I spent more time reading your cited paper than you did. I admit though that I skimmed it. Maybe you can find where the authors make a solid case for the AARP “crowding out” private sector jobs. I mean, their biggest arguement was that (paraphrase) State Employees are better educated and “would” have found private sector jobs had their State jobs not been saved by the Fed government spending…" I couldn’t find anything better than that in the paper, and I would like to read their analysis if it’s in there. The case being made is counter intuitive and I could find where in the paper they actually lay it out.

Some other interesting parts of the linked paper include: “It is important to note that we do not have enough precision in our estimates to conclude that number of jobs lost/destroyed was (probably) greater than the number created/saved. Our estimates are consistent with there being a net positive (but not large) number of jobs saved/created. We leave completing an evaluation of crowding explanations for future research.”

Read the conclusion, which is full of “more research needed.”

I wish you would spend more time reading your own cites before throwing claiming bullshit like the paper claims and backs up the premise that the stimulus “permanently transferred a chunk of the workforce from the private sector to the government.”

[Fear_Itself]

@Susanann

Frankly, I would just rather they give me a check for $275,000.00

Fine. As soon as you provide us with 200 feet of interstate highway widening. Contrary to conservative mythology, the stimulus was not just welfare shoveled of the back of a truck for jobs that returned nothing. We actually bought infrastructure with that money, you know.

[BrainGlutton]

@Qin_Shi_Huangdi

And its acceptable to cite Huffington? :dubious:

Yes, HuffPo has credibility, Drudge has not, and this thread illustrates why.

[Susanann]

Originally Posted by Susanann
Frankly, I would just rather they give me a check for $275,000.00

@Fear_Itself

Fine. As soon as you provide us with 200 feet of interstate highway widening. Contrary to conservative mythology, the stimulus was not just welfare shoveled of the back of a truck for jobs that returned nothing. We actually bought infrastructure with that money, you know.

I also can widen an interstate highway cheaper than $1 billion dollars per mile.

[gonzomax]

@Susanann

Originally Posted by Susanann
Frankly, I would just rather they give me a check for $275,000.00

I also can widen an interstate highway cheaper than $1 billion dollars per mile.

http://www.wsdot.wa.gov/biz/construction/CostIndex/pdf/HighwayConstructionCosts2005.pdf
So can anybody else. Cost from 2 to 9 million depending on whether a bridge is needed.

[Fear_Itself]

@Susanann

Originally Posted by Susanann
I also can widen an interstate highway cheaper than $1 billion dollars per mile.

No you can’t. You can’t widen a highway at any price.

[elucidator]

Well, sure, there are some stretch marks…

[Damuri_Ajashi]

@Punoqllads

Ah, yes, just finished debunking this for a relative. For those playing along at home, here (warning, pdf) is the report. If you look at table 4 and average out the job numbers, you get an average of 2.45 million jobs over 2 years, which works out to be $136,000 per job per year. And if you look at the Excel spreadsheet here and match up the percent lift in table 4 with the quarterly GDP in the Excel spreadsheet you’ll see that the $700B spent resulted in an estimated $2.9T increase in GDP, over 4 times what the government spent.

You don’t get it do you? Anything good that happened would have happened anyways and anything bad that happened is because of that Kenyan sitting in the white house. Facts are not going to get in the way of this storyline.

After pulling ourselves back from the edge of the abyss, we are pretending like we were never really in any danger to begin with and the stimulus was an overreaction to something that would have worked out just fine if we had only let the free market take its course and drive some of these banks out of business.

[BrainGlutton]

@Damuri_Ajashi

After pulling ourselves back from the edge of the abyss . . .

You sure? I’m still feeling a bit of vertigo.

[Gangster_Octopus]

@Sam_Stone

• The part that was direct infrastructure was too small, took too long, and wasn’t targeted well.

Actually this has more or less been the complaint of Paul Krugman and many other liberal commentators, that the stimulus was too small, composed of too many tax breaks, and it is true that the money did take too long to get out.

[Nars_Glinley]

@BrainGlutton

Yes, HuffPo has credibility, Drudge has not, and this thread illustrates why.

Except that Drudge isn’t reporting anything, The Weekly Standard is.

[gonzomax]

The jobs saved and created resulted in taxes being paid. They also have a multiplier effect on job creation. The cost per job created are fabrications designed to downplay the stimulus for political reasons. The Repubs have fought the stimulus and watered it down to hurt the economy and help defeat Obama in 2012.
We would have been worse off without the stimulus . We would have been much worse off if we did not save the auto industry.

[Dick_Dastardly]

@Sam_Stone

The conclusion of that paper:
He also addresses the argument that the economy was ‘worse off than thought’ as an excuse for why the stimulus didn’t produce the kinds of unemployment numbers predicted, and he addresses Krugman’s argument that the stimulus didn’t work because it was too small.

This paper actually comes out in favour of keynesian economics :

http://krugman.blogs.nytimes.com/2011/07/03/bad-tayloring/

and why should a guy like Taylor whose economic ideology was comprehensively trashed by the 2008 meltdown worth listening to exactly?

[Voyager]

@Damuri_Ajashi

After pulling ourselves back from the edge of the abyss, we are pretending like we were never really in any danger to begin with and the stimulus was an overreaction to something that would have worked out just fine if we had only let the free market take its course and drive some of these banks out of business.

Now, the evil stimulus is over, taxes have not been raised, and many states are oh so responsibly dealing with the economic crisis by cutting pay and firing people. And employment is booming - or not.

I’d say this was a plot to make unemployment high for 2012, but Republican economics is just as stupid pre-2008.

[elucidator]

A minor caveat. I’ve no doubt that there are some reptilian Republicans who are, in actual fact, plotting to unseat Obama with the high unemployment. But the true cynic is still a minority. For the most part, they are simply willing to accept the grim medicine of high unemployment, they are willing to let the poor bite the bullet, because they are hard-headed realists. They see an America corrupted by unions and fanciful notions of “equality” that don’t recognize the stern discipline of the Free Market, blessings and peace be upon it.

Sure, this will hurt the pampered and protected working class who have been misled by false estimates of their own value, this sharp corrective medicine will be bitter but will be lead to a more realistic assessment of their worth, i.e., not much.

True, there will be pain, and they are willing to share in that pain. Albeit a more or less abstract sort of definition of “sharing”.

[AntiCoyote]

Actually the best way money could be spent would be a Rural Electrification Act for broadband.

Since almost every place in the US has telephones, let’s do an REA but instead link it with broadband fiber, capable of carrying cable, internet and phone.

The government could pick up the cost, provide it to ANY company that wanted to use it. That way we’d get real competition between cable, Internet and phone companies as the lines would be for whoever wanted. This is what they did to get electricity and telephone service to areas too small to be served.

Competition will create jobs, having only one or two choices stifles that

[furt]

@Gangster_Octopus

Actually this has more or less been the complaint of Paul Krugman and many other liberal commentators, that the stimulus was too small, composed of too many tax breaks, and it is true that the money did take too long to get out.

I tend to agree with the last two parts of that, but the first argument, while providing a handy “no true stimulus” way to explain away continuing malaise, also presents, as a practical matter, a big problem for Keynsianism.

If an $800 billion “stimulus” was too small, it begs the question of how much would be enough. A trillion? Two trillion? A hundred trillion? I’ve never heard them say how much is enough.

But in any event, $800 billion was the amount that an ardent Keynesian president, fresh off a historic electoral victory and with great personal popularity, amid great economic uncertainty, and with his party in control of both houses of congress was able to get. In other words, everything was in place for the Keynesians, and $800 million was the most they were able to wrangle.

If a “real” Keynesian stimulus would have required 2 trillion, then real Keynsianism is moot as a policy option; the public support for that policy simply isn’t there.

[Lobohan]

@furt

I tend to agree with the last two parts of that, but the first argument, while providing a handy “no true stimulus” way to explain away continuing malaise, also presents, as a practical matter, a big problem for Keynsianism.

If an $800 billion “stimulus” was too small, it begs the question of how much would be enough. A trillion? Two trillion? A hundred trillion? I’ve never heard them say how much is enough.

But in any event, $800 billion was the amount that an ardent Keynesian president, fresh off a historic electoral victory and with great personal popularity, amid great economic uncertainty, and with his party in control of both houses of congress was able to get. In other words, everything was in place for the Keynesians, and $800 million was the most they were able to wrangle.

If a “real” Keynesian stimulus would have required 2 trillion, then real Keynsianism is moot as a policy option; the public support for that policy simply isn’t there.

You appear to misunderstand the concept. It’s not that 800 isn’t a true stimulus, that’s just stupid. It’s that more would have been better. Remember, as it was the ideological robots on the right demanded less stimulative tax cuts for much of the stimulus.

Up to a point, stimulating the economy can make up for lowered private sector demand. We didn’t get to the point, so more would have helped. We didn’t get to that point because the Republicans lied or were simply ignorant of reality.

[Voyager]

@furt

I tend to agree with the last two parts of that, but the first argument, while providing a handy “no true stimulus” way to explain away continuing malaise, also presents, as a practical matter, a big problem for Keynsianism.

If an $800 billion “stimulus” was too small, it begs the question of how much would be enough. A trillion? Two trillion? A hundred trillion? I’ve never heard them say how much is enough.

First, Krugman said the stimulus was too small at the time it was being voted on. Your criticism is valid for those who said it would cure all our ills and only now decide it was too small.
Second, someone here, and probably Krugman, noted how much wealth was destroyed in the crash. The amount of stimulus must be compared against that. if the stimulus is only a small fraction of destroyed wealth, even the multiplier factor cannot be expected to make up for the problem.
Finally, though the Dems were nominally in control of the Senate, the obstructionist policy of the Republicans, threatening to filibuster everything, meant they weren’t really. A better one would have been passable by the House. And yes I agreed Obama should have called their bluff and forced them to really filibuster, to show what lengths the Reps would go to fight against the average American.