CBO: Stimulus added up to 3.3 million jobs

Good point about the debt. Even if the stimulus did help things in the short run, it's going to cost a lot more down the road.

But the Republican mantra of simply cutting taxes, cutting regulation and cutting spending won't do it alone either. Taxes and regulation are as low as they've been since World War II, and yet we're still in this predicament. Austerity doesn't encourage spending.

 

That's fine. There's no moral imperative to keeping capital gains taxes at 15 percent, either.

 

Oh, I agree. No reason to incentivize them to hire if they aren't going to hire. But I can't blame them for not hiring if they think it will hurt their business.

 

No, you cure a broken arm by spending the money to fix the broken arm. And if you can't afford to fix the arm because the insurance companies won't pay it, the government should pay it.

Or, if you're a Republican, you say, tough shit. Live with your arm broken, because it's your fault you broke your arm, even if it isn't.

 

Not sure how commensurable the two are. One argument is that you absolutely had to stop the nose dive at the time, or face catastrophic and irreversible consequences.

It's kind of like global warming. You could argue that money spent now is money wasted because, in the future, economic growth will make us wealthier and technological advancement will give us better weapons with which the battle the menace.

But it might be too late by then.

Same with the stimulus in regards to the collapsing economy, no?

 

Agree on both. Though in many ways the business holds the leverage, especially now with jobs so scarce.

 

My wife is a kindergarten teacher and has many friends whose jobs were "saved" by the federal stimulus money that was spent to avert massive layoffs of firefighters, police and teachers. I appreciate the impact of this spending on those people's lives and families as much as anyone.

But these funds were stop-gaps designed to help state and local governments weather the budgetary storm until the economy improved and the revenue picture returned to normal. Now the money has run out and things aren't looking much (if any) better in most places.

So do we keep approving $800 billion stimulus programs to keep those public jobs filled -- without asking the tough questions about what all that debt means to our economy in the long term -- or do we simply accept that many state and local governments simply employ more people than they can afford to pay?

Just as you don't have to be a bleeding heart liberal to be unhappy about giving millionaires tax breaks at a time of war, you don't have to be a heartless conservative bastard to be concerned about the cost of a stimulus progoram with a highly questionable impact on job creation.

 

I can buy the argument that the stimulus was inefficient and not worth the cost of each job. But if it lead to crowding out then why did I just refinance my house at a fixed rate 3.75%? In the summer of 2009 when I financed the house it was 4.75%. Interest rates have declined.

Not maybe in the future the higher deficits will lead to crowding out. But if we are that worried about the long term effects of crowding out then I don't understand why the same people who hated the stimulus want to maintain all the Bush tax cuts.

And when Obama took office the economy was falling apart. Q4 2008 growth has been revised to -9.7% annually. The world was collapsing and the Administration was worried about another depression. Economics is not an exact science. Obama was throwing things into the deluge and the economy came out of recession pretty quickly, though I agree the recovery has been slow.

So on one hand I have the choice of voting for a guy who has not completely figured out how to lead us out of the worst economic crisis in 75 years and on the other hand a bunch of Republican candidates who sound just like George Bush, the President in Q4 2008, on the economy.

 

I think our monetary policy would have been lax with or without the stimulus. I think when the stimulus was being designed the Administration was pretty certain that Bernanke was not planning to raise rates. Which is why they reappointed him. Part of the policy response was to flood the markets with money. And looking at Europe right now that seems to have been a wise decision.

And I think the CBO's future concerns are valid. But we had to get out of this ditch. I think the people who disagree about a lax monetary policy are like Andrew Mellon in 1930. And I think cutting interest rates is a better policy response than government stimulus. But interest rates were already zero. But what happened, happened.

So why should I vote for people in the future who's obsession is in cutting marginal tax rates and hence increasing the deficit?

 

Let's sell California to China. Bills paid.

 

Or are their tax rates simply too low to pay them?