Here is a collection of good articles attacking the massive US stimulus plan. Fair play to Andrew Sullivan for linking to them. There’s hope for him yet.
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Broadsides against the stimulusFebruary 6th, 2009 |
 18 comments to Broadsides against the stimulus |
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This is one of the best takes on the stimulus I’ve seen.
Link(Link)
John_R, that’s one of the funniest takes I have seen.
Seriously, the public spending part of the “stimulus” should be seen as what it is – a massive package of political favours. It will not stimulate the economy because there is only so much hot money in the world economy looking for a home. If governments suck it all up by offering a nice safe rate of return on bonds issued to fund the spending then there will be less money available to private companies. So, really it is as stimulating as a dose of horse tranqullizers. There will be some stimulus from the spending once the money eventually gets spent, maybe 12 to 24 months later but it won’t compensate for the loss of investment in the private sector.
John R: Ha! Christ, the least we could ask for is a raise in interest rates.
The libertarian Cato Institute is currently running an advertisement in newspapers opposing this ludicrous “stimulus”. They need financial help to run their ad, signed by 300 economists, opposing President Obama’s Children’s Indebtedness Act. Follow this link to contribute. Statement of interest: I am a Cato Sponsor, and have already contributed to this campaign.
At this time the networks are reporting a compromise stimulus bill has the votes.
In the US this means one or two Republicans have been bribed and a trivial amount, perhaps 2%, has been cut from the bill to allow it to be heralded as a compromise.
When cuts are made to omnibus bills the usual practice is to cut something intended well in the future.
Today’s cuts were probably amounts scheduled to be spent in 2010 or 2011. So in reality probably nothing was cut.
Obama’s economic team has declared that a wealth multiplier of 1.5 applies to the government spending that they are planning. His recent comment that all government spending is a stimulus confirms that the believes in this Keynesian multiplier for all spending. This is idiotic and reckless, and enough to reject any spending plans that they put together, no matter how small or large.
I think it is more than strange to believe that when the government buys 2 TV sets, the government gets 2 TV’s and someone else gets one for free. A great deal. But, it is entirely due to miscounting transactions as being wealth.
If Obama were correct, that $100 in government spending produces $150 in wealth, then we should all benefit from counterfeiting, as I explore at Let’s Counterfeit Our Way to Wealth
On the other hand, taking taxes from productive people, then giving it to companies so that they can hire more people, is a form of “trickle down” thinking. It would be much more efficient to just give the money to the unemployed, except that the welfare component would be obvious.
If we are depending on trickle-down, then leave the money with the people who earned it originally, and they will find a way to earn a lot more and employ people along the way.
Andrew_M_Garland
Easy Opinions
Please, do not forget to acknowledge that the gov’t spending multiplier is NOT a constant. You can apply the logic behind the Laffer curve to it. If you start with no gov’t spending, then a marginal amount of it can have a huge (and rising with more spending) multiplier effect – a fleet to combat pirates, an interstate highway system, etc. This goes on as long as you have unfunded public goods. However, at some point you reach an inflexion point, further gov’t spending crowds out private spending and/or funds wasteful projects more so than it does useful ones, and the multiplier drops below 1.0 – and we are talking a multiplier on optimal spending. What kind of spending are we getting instead?
Health care, education, housing, alternative energy, and pork spending are NOT public goods. If anything, H is likely to gut spending on defense – the epitome of a public good. The spending on infrastructure I could grudgingly go for, but the rest of the deal is San Fran Nan’s wet dream – and that involves a big dildo, me – Joe Taxpayer – bent over, and no lubrication.
There is no hope for Andrew…
sad that…..
I like Dave Ramsey’s proposal for stimulating the economy, if we have to have something called a stimulus. The stated point of the stimulus is to create jobs and increase circulating wealth, right? They claim to be aiming for 3,000,000 jobs created.
His plan: give a $20,000 tax credit to any company who hires an employee in 2009 and keeps them on the payroll at least 12 months. You’d probably need a constraint in there like the company must have net-positive job growth so they don’t just fire everyone and rehire them.
But net cost for 3,000,000: only $60 billion. That’s $640 billion to $840 billion less than the current plan (depending on which one you look at), and it stimulates job growth right now!
Corruption as usual. Yesterday I said there were probably no cuts at all. Just a rearrangement of lies.
This morning the media seems unclear about how much is in the bill. Unclear by roughly $50B, I see numbers from $780 to about $830B. I doubt anyone actually knows.
As certain as the day follows the night a couple of Republicans broke ranks to get some goodies. Then with resistance hopeless another handful broke ranks and took the bribes too.
As usual Senator Specter, Republican, spoke for the moral leper brigade.
“It was the best we could do!” said the Senator.
Well Senator, tell me this. Since it is a crappy bill why vote for it at all even if you can’t get a better one?
Paulson’s wretched TARP was a 100 times worse than Obama’s stimulus.
Obama’s stim may not be perfect but at least its trying to help ordinary Americans, unlike Paulson, who gave his buddies in Wall Street bags of taxpayer’s money. He knew his “plan” would not help home owners and businesses, he just wanted to bail out his friends.
Any stimulus should exclude the banks; just give help directly to US taxpayers.
The best way to stimulate the US economy would be to sack all the bankers and then have them publicly flogged then hung from the neck until dead.
The Pentagon’s ridiculous budget needs to be slashed pronto.
Relugus
Senator Barack Obama supported TARP (and he would have done even if Bank of America, and others, were not sending millions of Dollars to his Marxist comrades in ACORN), after all the government also backs up General Electric’s 138 billion Dollar debt – and where would Comrade Obama be without NBC?
Nor was it a hundred times worse – TARP is about 750 billion Dollars wasted.
And the Obama binge will be another 800 billion (plus) Dollars wasted on top.
“Trying to help ordinary Americans”
Me and the tooth fairy have a nice bridge to sell you – it will really be a good “investment”, please trust us.
What interests me is the three (?) Republican idiots in the Senate.
First get a House bill of pork spending and “tax cuts” for people who do not pay taxes, of some 800 billion Dollars.
Then increase this to 900 billion in the Senate.
Then allow the three stooges to “push it down” to 800 billion (plus) again.
Why do Snow, Collins and Spec not understand that they have been conned?
Where do the Republicans find these idiots?
And Judd G. as well. How can he not understand that President Obama has a Marxist background going all the way back to childhood (but without a break over his whole life) – that the only “commerce” he is interested in is getting the capitalists to sell him the rope with which he will hang them.
And the corporate managers – falling all over each other for bailout money, and to safeguard the regulations that protect them from shareholders (the alliance of corporate managers and the far left may be sick, but it is very real).
Is there a production centre for these creatures? For it is hard to believe they human beings.
For the record, if you wanted to help the economy you would do the following.
Cut (yes CUT) government spending – and get rid of the regulations that prevent markets (especially labor markets clearing).
“That is what Herbert Hoover did after 1929”.
No it is the opposite of the tax raising and labor market (“we must keep up demand by preventing wage cuts”) rigging Hoover did.
But you are close.
It is what the “evil, corrupt” Warren Harding did in 1921 (in the face of the busting of the World War One credit money bubble).
By the way the Federal Reserve RAISED rates in reaction to that bust (they cut them after the 1929 bust – and after this one).
“Slashing” the Department of Defence budget.
How does that fit in with the Obama Administration policy of winning the war in Afghanistan?
I am not saying that this war is a good idea or not (what do I know after all I was against going into Iraq and that has turned out to be a win, making my warnings look silly – at least just now). But it is policy.
Of course slashing the DoD budget would ensure that it was the People’s Republic of China (whose military budget is vastly greater than D.C. officialdom likes to think) would dominate the world – but, in private, the modern rulers of the P.R.C. may well be less Marxist than President Obama is, so (PERHAPS) China defeating the United States might not be so terrible.
In any case the whole debate is false – for it is not military spending that has gone out of control over the last forty/fifty years it is entitlement program spending and other such.
Just look what has happened to government health, education and welfare spending over this period.
Although Social Security (old age pensions), which started so tiny, has been growing like a cancer since the 1930’s.
My solutions:
Sack Bernanke and have him thrown in jail.
Throw Greenspan and Paulson in jail as well; both criminal scum like Bernanke.
Cut the worthless, wasteful Pentagon’s budget by 60%. At the very least, the incompetent perfumed princes and pen pushers should find the taxpayers money they have “lost”.
The Pentagon should be the primary target of any true believer in fiscal prudence.
Abolish ALL corporate welfare, make subsidies and tax breaks for businesses illegal.
A 110% tax on all banker bonuses; people should only be paid for their work via salaries, not this bonus bullcrap which has caused this mess.
Well, I’m expected to be civil here so I’ll only say that Regulus is spouting absolute nonsense. Making political prisoners out of Bernanke and Greenspan would be convenient banana republic style scapegoating to cover up for our highly culpable congress.
As for cutting defense spending, that is not going to help anything, it means pay and benefit cuts for under paid troops or at least massive cuts in supplies and equipment. I’m fairly certain that laying off thousands of defence workers during a recession is not considered a “stimulus” even in marxist economic text books
How dare they question the Dear Leader and the politburo? Racists all.
The government gives us the post office, HEW, the Dept ofEducation, the IRS, and they all make money! Especially the printing bureau!
Besides we can balance the budget if all the politburo members pay their taxes.
The Pentagon has no idea where 25% of its budget is, because their money management is totally and utterly incompetent.
Eisenhower must be spinning in his grave at such incompetent handling of taxpayer dollars.
That defence employs lots of people is an argument which sounds exactly like Labour’s argument for the expansion of the public sector.
Health and Defence are roughly equal in terms of importance; the former is actually useful to the taxpayer, the latter is only useful to politicians. Invading another country is the very definition of “Big Government”. Bush wasted US taxpayer dollars on Iraqi “rebuilding” and Iraqi state health, wasting money on Iraqi schools while cutting funding to American schools.
People who work in the defence sector contribute little to the economy because the taxpayer is paying their wages.
The Pentagon is IMHO worse than the NHS in that its job could clearly be done better by a smaller, cheaper department.
The best solution would be privatisation. Think about it, if the US privatised its military it would be able to slash taxes to the point of nothingness, thus boosting the economy enormously.