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stimulus spending doesn't work


Azazello1313
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If you would note the WH numbers are counting job savings, and the AP only counted affecting the rate of unemployment. Heck the NYT even illustrated this fact:

 

So one could assume the unemployment rate would be WORSE if "dozens of workers" were not being paid salaries. However, the economists in the NYT article seem to be ignoring that relationship.

 

umm, perhaps it is you (and not the economists consulted for the AP piece) who does not understand this, but significant numbers of "saved jobs" WOULD be reflected in the rate of unemployment. particularly in comparing the unemployment rate of places that received a lot of stimulus ca$h versus places that didn't. but their conclusions....

''There seems to me to be very little evidence that it's making a difference,''

''My bottom line is, I'd be skeptical about putting too much more money into a second stimulus until we've seen broader effects from the first stimulus,''

''As a policy tool for creating jobs, this doesn't seem to have much bite. In terms of creating jobs, it doesn't seem like it's created very many. It may well be employing lots of people but those two things are very different.''

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umm, perhaps it is you (and not the economists consulted for the AP piece) who does not understand this, but significant numbers of "saved jobs" WOULD be reflected in the rate of unemployment. particularly in comparing the unemployment rate of places that received a lot of stimulus ca$h versus places that didn't. but their conclusions....

''There seems to me to be very little evidence that it's making a difference,''

''My bottom line is, I'd be skeptical about putting too much more money into a second stimulus until we've seen broader effects from the first stimulus,''

''As a policy tool for creating jobs, this doesn't seem to have much bite. In terms of creating jobs, it doesn't seem like it's created very many. It may well be employing lots of people but those two things are very different.''

 

I guess I'm not explaining my position very well. It appears to ME, and of course, I am no economist, they seem to be only considering jobs CREATED, not saved. I mean even your last quote contains an allusion to that.

 

Saying that "stimulus spending doesn't work" is an awfully broad conclusion to draw from "stimulus spending isn't creating jobs"

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I tried to find the actual study they are quoting, but to no avail.

 

Now I know why:

http://www.marginalrevolution.com/marginal...e-stimulus.html

 

that's where I got the original link from, I fail to see how this really impacts what they are saying. they never said they were quoting a "study", they said they reviewed some data (which I would infer from the content consisted of some comparisons of where stimulus money is spent and corresponding unemployment rates) with several economists and the economists concluded that it demonstrates the stimulus is hardly having any effect. granted, it doesn't exactly pass academic muster in that form, and doesn't exactly lend itself to critical review...but apparently it was enough to persuade the economists they interviewed. hopefully some more rigorous studies will follow, and the reporters will share the data they are looking at with the economists. :wacko:

 

edit to add: but it is good to know that libertarian blogs now carry more credibility than the AP and NY times. :D

Edited by Azazello1313
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More to the original point of this thread, from what I've read about historical responses to recessions its not that "stimulus" doesn't work. It's that recovery universally takes at least between 3-6 years and throwing gobs of money at the problem invariably fails to accelerate the process. On the other hand, recovery time without any economic stimulation invariably takes longer.

 

Bottom line: (1) while economic spending ALWAYS increases debt, it NEVER brings about a permanent solution quickly; and (2) smart leaders should still be willing to strategically invest in long-term recovery goals.

 

That's all I got to say.

Edited by yo mama
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I just think that in the information age, the government throwing money around doesn't really inspire other entities and individuals to do the same. if anything, it just makes them more nervous (I think we are definitely seeing that now). but govt spending getting other people to throw money around is what the whole keynsian premise of multipliers and "priming the pump" and spurring on the "animal spirits" and all of that is based on. I just don't think it works, and I think the last year pretty well proves it (and so does japan in the 90s, and every other attempt of major world governments to spend their country out of a recession in the last half-decade). I really think at this point that monetary policy is the only real countercyclical tool that actually works these days. and maybe some types of spending and some very specifically targeted tax breaks aimed at job growth (like temporarily suspending the payroll tax or something).

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