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Discussion: (9 comments)

  1. I trust that even using Russ Roberts’ standard, we can say with some confidence that the Obama administration policies collectively have had an adverse effect on the economy even if we cannot parse out with any precision the contribution made by any one of these individually.

    1. Remember, the ~entire~ premise behind fiscal stimulus is that gov’t borrowing does not crowd out private investment, because there’s a general glut of savings — in other words, idle resources.

      You can disagree with that assumption, but unless you explicity acknowledge that disagreement, you’re not advancing the argument.

      1. Steven Hales

        Is the anticipation of higher growth from a stimulus offset by the perception that higher debt levels will need to be serviced by higher levels of taxation or more borrowing or a combination of both or perhaps a cut in spending? If it is then a fiscal stimulus can have no effect or perhaps a negative effect on growth.

        And isn’t the notion of “crowding out” only strictly true in a closed economy or one where sovereign finance is mostly domestic in origin? In the case of the stimulus financing during the relevant period, over 50% of the deficit was financed overseas. That means that there wasn’t enough domestic savings or in your terms idle resources. The reason the stimulus was such a failure was that we have wrung out labor in most industries to such an extent that the stimulus was largely a capital stimulus. The equivalent of restarting a factory without workers. If the stimulus had instead targeted labor intensive service jobs such as gardening and cleaning services we might have seen an effect. And it could have been billed as the clean and green stimulus. :)

  2. Andrew Dunn

    Did the ARRA work? Measure it against what was promised. Two things immediately come to mind. Green energy investment and “shovel ready” jobs. With the latter Obama himself joked that no such jobs existed – indeed, in California most recently the massive “shovel ready” work project (high speed rail) has all but been tossed on the ash heap of history. Green energy? Anyone remember Solyndra?

  3. Let me remind you that the latest news from the Unemployment front says that 1,154,000 less Americans are employed today versus January 2008. Now someone tell me again about those 3,000,000 jobs added in 2010. The Heritage Foundation reports:

    Today [as of July 2013], 5.7 million fewer Americans are working or looking for work. This drop accounts for virtually the entire reduction of the unemployment rate since 2009—those not looking for work do not count as unemployed.

    Who is kidding who about the additional 3,000,000 jobs added in 2010?

    And as long as I am asking questions – Why did AEI use the Obama propaganda unemployment chart instead of one that displays actual unemployment rates vs projections?

  4. mesa econoguy

    I suspect Russ (studied under him) would agree with the assertion that the stimulus failed by its own standard.

    Here is the financial autopsy –

    http://stawealth.com/daily-x-change/1957-5-years-later-what-did-the-arra-achieve.html

    “The failure of the stimulus was a failure of the neo-Keynesian belief that economies can be jolted into action by a wave of government spending. In fact, people are smart enough to realize that every dollar poured into the economy via government spending must eventually be taken out of the productive economy in the form of taxes. The way to jolt an economy to life and to sustain long-term growth is to create more incentives for people to work, save and invest. Let’s hope Washington’s next stimulus plan is aimed at reducing the tax and regulatory burden on American job creators.”

  5. John Mcaluney

    On very a special Obama economic stimulus…Numbers mean nothing as long as its for The Middle Class Union Members…

  6. Benjamin Cole

    The Fed—has been way too tight. That overrules everything else. Forget Obamacare and the $1 trillion sucked out of the private sector by the DoD, VA and DHS.
    If the Fed brings inflation to zero—and that seems to be the plan—then you ain’t going to have a recovery.

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