The Stimulus was a Dismal Failure - This Chart Proves It
inlet13
Posts: 1,979
http://www.sovereignman.com/wp-content/uploads/2012/07/070612rbjune-577x338.jpeg
Feel free to discuss...
Feel free to discuss...
Here's a new demo called "in the fire":
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Post edited by Unknown User on
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I don't subscribe to the Democrat pom-pom collector club, such as yourself... or the Republican giant foam finger club, such as others here...
however...
I admit I have my anti-stimulus pom-poms a-wavin' all the time...
but, seriously, how do you defend success of stimulus after looking at that? Besides claim the chart is "bogus" and act upset.
And yes this occurred with the labor participation rate hitting record lows - if it didn't, the take-away would be even worse - check the 10.9% on the chart.
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...
Also, the 405 to 605 and 22 exchange that was notorious for traffic jams is finally getting fixed. They are putting in a crossover carpool lane and making the 7th Street off ramp wide enough to handle the Cal State Long Beach traffic. We also are getting a carpool lane extended the lenghth of the 405, from El Toro to the North Valley.
This is not to mention the fixing up of I-5 between Grapevine and the Gilroy pass. Makes driving up to see the Bridge School a lot nicer.
...
I would rather us have nice freeways to drive on, than more missles to blow up roads in the Middle East.
Hail, Hail!!!
I'm not sure why you think I'm a Dem pom-pom waver, but oh well. Maybe because I've disagreed with you on your 'the Fed is the reason for everything wrong, it will destroy our country, and Ron Paul is our savior' threads? What does the Ron Paul club wave?
I was disagreeing with the chart because it's poorly done and it's misleading. You seem dead set on keynesian intervention being the wrong thing to do, no matter what, that you're posting a bogus chart to try and prove your point. It seems like your cheer-leading is blinding you from seeing something objectively.
If you think the stimulus didn't help, that's your opinion. There's no way to prove for certain that it helped or did not help, because there is no control group. It's my opinion that things would be worse without it. I could reference things to support my point, but the counter would be to point out other variables that factor in economic upswings. Back to the chart, the person who did it is supporting his/her point by saying what Obama predicted the unemployment rate would be in the future, comparing it to the current rate, and then what s/he thinks the "actual" rate would be by using the labor participation rate. Not only are there flaws in the info presented, it doesn't "prove" the stimulus didn't work.
not to jump the tracks here but I listen to your song "in the fire" every now and then, love it !
Godfather.
Where are those jobs? 8.2% floor eh?
http://news.yahoo.com/california-oks-fu ... 24919.html
"Is there additional commitment of federal funds? There is not. Is there additional commitment of private funding? There is not. Is there a dedicated funding source that we can look to in the coming years? There is not," Simitian said.
Tell you what, if I am going to buy any of those bonds I will need both federal and state tax exemptions and a happy ending.
I gotta admit, i'm kinda with Go Beavers on this one, Inlet.
I don't know WHAT i was expecting, but by the title of the thread, i knew it had to be "interesting", since no one (and i thought we already beat this horse to death) can really tell you what would or would not have happened without stimulus funds.
How can you take this chart seriously at all?
What is the "without stimulus" line supposed to be indicative of?
Did the chart-maker hop on the C-Squared light-train to the alternate Non-Bailout Universe?
I mean seriously,
i'm all for the theory of economic non-interventionism, ie. "free" markets, or whathaveyou.
However, as stated, I firmly believe that without the initial set of Bailouts along with all the bond-offerings \ discount windowing \ and "Quantitative-Easing-To-The-Moon"-ing, we would be in a universe SOOOOooOOoOO far-far-far-far-far beyond imagination that this chart is some insane delusion.
Unemployment would have run (and this is obviously a joke-estimate) somewhere north of 30 to 50%.
EVERYTHING was going to collapse with out
a. massive currency inputs
b. backstops & guarantees out the ass
c. THE AUTHORITY TO DO WHATEVER "THE RULERS" WANTED, WITH NO CHECKS WHATSOVER
In all of the bailout \ stimulus fiasco, i think people really miss the largest chunk of that equation, ITEM C, which essentially means, that through the explicit authorization of the bailout legislation, NOW AND FOREVER (or until the power is ceded), the "owners of the system" were able to do ALL KINDS OF PREVIOUSLY UNIMAGINABLE HOCUS-POCUS behind the scenes, largley through The Federal Reserve, WITH NOBODY ABLE TO QUESTION OR EVEN OBSERVE WHAT IS TRANSPIRING. The Fed even stepped on the SEC's toes for fucks sake.
I just don't get the notion that without ALL OF THIS,
this economy would have only bumped up 1% of Unemployment. 2% at best.
That's what this chart shows? You think that this assessment is accurate?
I know we've been over this before,
but i think it's delusional (given the severity of reaction to the "crisis" of the regulators\system owners) to think that the system itself was not at jeopardy in the 2008 Crisis.
The fallout, from the top, would have led straight to the street. And it would have been EXTREMELY SEVERE.
Almost all banks.
Almost all morgage lenders.
Almost all insurance underwriters.
Most mutual funds.
Most large multinational corporations (short term funding, and stock price related issues, coupled with demand dropping at terminal velocity)
Just starting with that list, which i still consider at "the top", the global spillover would have been EPIC.
Currency or Bank Run issues would probably flare up here and there at THE LEAST (bank runs)
Federal and local governments & courts would become inundated and overwhelmed.
Credit rates would be through the roof.
Layoffs would have been epic.
Hirings. What hirings? Maybe bankruptcy lawyers.
Lending would have ceased almost entirely,
even national governments would have troubles securing needed funding through bonds since the banks would all be crippled\dead and the private market would be bankrupt, and then the SOVEREIGN defaults would start.
Are we still ultimately headed to the same place due to the implicit nature of long term credit cycles? Yeah, probably. But No-Bailout\Stimulus would have just been the bat to the knees\head that jumpstarted "the end".
2cents
If I opened it now would you not understand?
"With our thoughts we make the world"
Look, I'm not trying to turn this into a thread on what you believe, because quite frankly I don't care what you believe. All I know is what I see here. I make opinions based on what people write. For you, I can't think of one post where you've not toe'd party line - for Democrats, that is. That's what I see. As for the Ron Paul fan club, and what they wave, I have no idea maybe D and R pom-poms with big slashes "NO"... I don't know. Maybe anti-stimulus pom-poms? No idea.
First, I'm fairly certain that President Obama's administration came up with the data to put this chart together. So, if you're upset that it's "poorly done or misleading" I sincerely think you should talk to that administration. My issue is simple - I kinda agree with you regarding the term misleading - but let me explain why. It was poorly done and misleading at it's origin, but here's where we differ... I knew that at the outset. When they made the "forecasts" for this data I knew it was complete bullshit. You, on the other hand, probably bought into it (that's speculating). If you did buy in, you weren't alone, tons of people did (both Ds and Rs)... but, it was misleading and poorly done at the outset. All those who backed the stimulus, said it WAS NOT misleading or poorly put together data... now, that it hasn't come to fruition... it WAS misleading or poorly put together.
So, since this chart was created using the President's own data, all this proves is his forecasts were completely off. Completely off. Terribly off. In fact, they were so off that by their own data "the do nothing approach" would have led to a much lower unemployment rate (according to their forecasts) then we currently have.
So, what's the lesson? Well, the lesson is don't buy the bullshit that they sell to say stimulus works. Why? Because it's bullshit. They say it will do X Y Z, and when it does not, people like yourself say, we'll that's because of A B C. We should try it again and if it doesn't work again there's some other caveat. It gets old.
Yep. I don't think it helped. This chart says according to President's own metrics, it didn't help. And this is not to bash Obama. It wasn't all him. President Bush was also involved. It was Rs and Ds... they all were behind this. It was rare when you saw someone who wasn't.
What it proves is the stimulus didn't do anything close to what they said it would. That's factual and you can't debate it. If this were Bush, we'd be hearing "he lied" and whatnot - like the Iraq war. They said we'd see a much, much, much lower unemployment rate and we didn't. In fact, once again, the chart proves that what the administration said the Unemployment rate would be like with NO stimulus is much, much, much better then what we've seen. That's what it proves. You can continue to buy into the garbage that this stuff saved our lives, but personally, I think it's foolish and this chart backs my point.
Backing the stimulus is the equivalent to saying to your boss X business move is going to increase sales by 10% - sales would otherwise only increase 2% if we do nothing, management signs on to your idea and sales go down by 5% in response... you go to your boss and say, well that's only because of a, b and c happened. Let's do it again. If the boss signs on again - he's a moron. He's got data saying what you said would happen did not. In fact, you'd be lucky in most companies to keep your job.
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That's fine. Lots of people buy into bullshit after seeing data that proves the propaganda pushing bullshit policies was wrong. You're not alone.
You're right. No one can tell you what would or would not have happened. Here's the thing - why was it ok for the administration to do so and sell their policy based on what "WOULD" happen if adopted or not adopted? Then when we look at what really did happen, we can't use their own metrics on what would or wouldn't happen to say - ummm... according to your data, adopting the stimulus made us WORSE OFF than what would have happened had we not enacted the stimulus - remember, this is was the forecasts of those who wanted the stimulus - not the anti-stimulus crowd (like myself or those like me). Seriously, think about that.
My response, once again, is why the fuck did anyone take this seriously back pre-stimulus? THink about it. You're complaining about it now - after the fucking fact. This bullshit data (forecasts) were used to say what would happen. People were all about using this data when they adopted the policy.
From reading your comments - I think you honestly do not understand when and by whom the data was created. Please try to understand that before you comment further.
This chart was created by pro-stimulus folks in order to adopt the stimulus as I've said about 20 times now.
False.
Disagree totally. I do think we would have had a worse recession (depression) in the SHORT RUN, but I believe it would have been over - I think unemployment would have reached maybe potentially 15%, but I think we'd potentially have a lower unemployment rate right now. On net, we would have lost less jobs in totality. Markets would have cleared earlier with no stimulus. Regardless, OUR coments in 2012 are as nonsensical as the Obama administrations' data that said what would have or would not have happened had we adopted the stimulus.
Ugh. Honestly, I don't mean to get frustrated, but you clearly have no clue who put the chart together or at what time. THIS IS THEIR DATA! That's the pro-stimulus crowd who said what the economy would have done without the stimulus. They said this back in 2008. That's their data.
All I've said is I believe stimulus was a mistake. That's my belief, and I use no metrics. I use no forecasts. I use economic theory.
THEY said stimulus would work. They said it about 4 years ago, pre-stimulus. They used THIS data to say what would or would not happen if the stimulus was adopted. I say --- look at YOUR data. The data YOU used to sell the stimulus. The data that says what will happen in each scenario. Then look at what did happen. Were YOU right?
The answer is without any doubt- "No". The stimulus was a failure according to the metrics they used to point out what would happen.
The fall out did lead straight to the street and it was extremely severe. Actually, it "is" extremely severe and it's not over, it's simply being extended. I disagree with you in regards to this. But, my point is not that it wouldn't have been worse in the SHORT RUN. It would have been worse in the short run with no bailout - not to the extend you say, but worse than it was. But, once again, it would have been BETTER in the LONG RUN and in AGGREGATE. Think about it logically - this started in housing, spilled into finance, and now has infested government. It wouldn't have spilled into government with the severity it has if government didn't involve itself the way it did. That said, it may have been worse in finance. But, you know what, in my opinion, that wouldn't have been as severe as you say, in fact, I think the entire mess would be ending now or soon; instead, we've prolonged it... globally... this will be a mess for the foreseeable future. But, that's my opinion.
Once again, back to the POINT - if I created data pre-stimulus that said what WOULD happen... admittedly, that could be used against my point of view now. Ironically, that's the point of the thread! This is their f'ing data! This is what THEY said! Now, you're saying well inlet you're wrong for posting the data they used to sell the stimulus (saying what it would do) and using it now to say it didn't do what they said it would at ALL.... I don't think you understand all this, but if you do, ummm... no.
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You posted a link to a JPEG in your OP, and said "feel free to discuss".
you didn't post a link to an article
in fact the JPEG backs out at the next "/" to an index directory
you rant at me\imperial "us" for "not understanding where the data\chart comes from",
yet you provided no source, link, or explanation.
How is that "my" fault, or failure to understand?
your whole quazi-partisan (just anti-obama?) rant is off in its own little world where you insinuate that the chart makers (liberals, obama? source?) are either lying about how much the stimulus would help (why?), or else you may be asserting that they were just totally naive, and ignorant of real "economics". (is it this?)
Either way, i could care less.
The chart was written by one faction of an establishment class to serve it's own ends.
I wouldn't expect it to tell any more or less of the "truth" than serves their ends.
"Their" ends (the owners of the banks and of this country, and of "the system"; don't forget JP Morgan\Goldman Sachs gave huge to the Obama campaign last time, and are giving again!) were clearly to bailout their own failing\ faltering financial institutions and to stave off any further\preventable political unrest -- the like of which kind is caused by systemic failure\collapse\catastrophe.
To degree that this chart helped politically to enact their plan to bailout their own banks, I'd say it was a success, and thus a "good" chart.
Even if the numbers for each line are total bullshit.
I'm just trying to figure out what the game plan is now.
Half expecting Romney and an Obamacare overturning in a few months,
but really clueless at this point ( i think\fear our leaders may be too, :( :( :( wahh wahh ) ...
PS - the "resolution" or "ON AGGREGATE" \ in the "LONG run" that you are talking about ... that sort of resolution to this "crisis" ultimate ends with the resolution of a US Treasury bubble. Do you really think that kind of collapse (ie. US Public Debt Default) is easily surmountable without massive\unfathomable political\globalgeopolitical ramifications? ??? Chew on this, the absolute haywire in the LIBOR and the JACKING THROUGH THE ROOF of ***RATES*** following a NON-BAILEDOUT "collapse" could have led (follow this logic: the immediate SPIKE IN RATES...) to an INABILITY TO AFFORD INTEREST PAYMENTS ON DEBT for the US Government. THIS is part of the underlying reason banks were "too big to fail". Systemic failure \ collapse of lending \ leading to a market driven (instead of government manipulated\supressed) interest rate spike was to be avoided at ALL costs.
If I opened it now would you not understand?
Fair enough. Maybe I should have provided more clarification. But, now... you know and knowing is half the battle.
It was the Obama administration data... pre-stimulus, with the goal of saying "this is why we should enact stimulus" it will do this to unemployment the following 5 or so years. They went on to also show what would happen to unemployment if they didn't adopt the stimulus the following 5 years or so.
Clearly, my point was to say... um, unemployment is much, much higher than both of these measures. Their estimates weren't even close. We only tried one approach - adopt stimulus. We know the results. We also know what they said the results would be beforehand. Comparing the two - we see - wow, they were terribly wrong. Then, of course, that "no stimulus" data that they put together still sits out there. If that's where we WOULD HAVE BEEN, I'd prefer that. I think 99% of the public would.
The chart maker was Christina Romer who was the architect of the stimulus plan (who was the chair of the Council of Economic Advisors to the Obama administration). It was basically crafted by the Obama adminnistration to tout what WILL happen if we adopt the stimulus.
I'm asserting simply: They were horribly, horribly wrong in their assertions about what would happen if we had a stimulus.
That's cool. Then why comment?
Well, who ever it was to serve - it was wrong - and that's the point. Like I said to GoBeavers, at the very least it shows that the stimulus didn't work the way it was "said" to by the authors of the stimulus. It didn't come close to meeting the goals they established (AND FORECASTED).
Ha ha... well, don't be so sure that political unrest isn't coming. In fact, I think you know it is.
Ugh. It's been proven to have been complete bullshit (when comparing to what really happened). Propaganda for a policy (that's been shown to not work in the way it said) is not "good".
Ok. They are (and have been PROVEN to be) total bullshit, so I agree with that.
It remains to be seen, but I see no reason to think Romney won't enact these same asinine policies... he seems like an Obama clone - The problem I have is who in their right mind would enact another one of these policies even after we're shown... in this chart... when comparing it to reality of what happened... that they didn't work.
I do think there will most likely be massive/unfathomable ramifications long term. But, as I said previously, I think if we didn't involve ourselves in bailouts and stimulus and QE and money printing, etc.... we'd be better off. Sure, things would have been worse in the short term, but our government debt wouldn't be so fucked in the long run, which gets at your point via interest rates and debt. I'm kinda surprised that you don't see what I'm saying there. The problem started with government infringement (in my opinion), but even if you don't buy that, you'd admit the next casualty was housing. This blended into business/finance due to ABS, MBS, CDOs, CDSs, etc. Sure, government was also involved, but I think we disagree with the extent. I don't buy the logic that there was no choice for the government to not involve itself. I think it would've been messy, but short run messy. Instead, the government involved itself. Now, we have governmentS close to default. Your fear is going to be realized in my opinion in this long run, but I disagree that it HAD to be this way. Government involving AGAIN to save the day (and I truly think they mean no harm) will trigger this end. It's ignorance that keeps this "they will help" charade going... especially after being shown the pre-stimulus chart in this thread and what actually happened.
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from the wiki:
"Romer stated that unemployment would not surpass 8% if the Obama Stimulus Plan was passed. [17] Romer calculated that a $1.8-trillion package was necessary to fill the output gap, but Summers rejected the proposal and opted not to include it in the memo fearing that a trillion-dollar package would not pass through Congress.[18] The Obama administration ultimately passed an $800-billion package."
Political pressures caused capitulation and "compromise", which means that her chart, apparently based on 1.8-trillion dollars, was cut short by HALF in it's original form.
If you want to total up all of the successive bailouts, and argue she was still wrong, what the hell.
Although the time value of money in a crisis is indeterminable.
Either way, i'm not sure i'd go railing about it.
It was a guestimate chart used to provide some sort of rationalization for a tough-sell policy (a bailout) ... using it to argue YOUR case is no smarter\dumber than the elite using it to make their own.
If I opened it now would you not understand?
First, from what I understand, the data in discussion was the data used to back the bailout that was inevitably passed (the $800 billion package). So, your point hoping for a hole in the data is lost there.
Second, I'm not using it to "argue my case". I'm using their data (that they created themselves) to argue against "their case". I know you disagree and seemingly side with bailouts and stimulus, but I sincerely feel you're not seriously trying to understand my perspective: This is their data, not mine. I thought this data was BS at the outset. I did not use this data to say the stimulus would fail. They used it to say it would succeed and these were their metrics of would be success. So, in total, I'm using their own data on what would happen to show... what they said was factually and undeniably false.
A deeper question would be - why do you care, inlet? The past is the past. Even if it were true that no stimulus would have been better, we can't go back in time and have a re-do.
My answer is simple - I think this will all happen again. The reason gets back to what we were discussing before. But, basically stimulus (and government intervention in general begets more stimulus and more government intervention). It's like an alcoholic who needs a drink in the morning to fight the hangover. My perspective is - I don't want our idiotic populace to not realize that these experts got things miserably wrong in the past.
So, in conclusion, I don't think we're really that far off. I think you're saying inlet you can't use this data to show your preferred policy (no stimulus) is the better of the two. First, I don't think that's what I'm doing - I'm saying they said X would happen and it didn't at all. But, let's avoid that part for the sake of argument. What's really happening is - I'm saying back - THEY used this data to say their idea (stimulus) would be the better of the two. They built public support with this bullshit. You can't have your cake and eat it too. In other words, if I can't use this to show they were wrong with their own data... they can't use it to say they WOULD be right in the future. No one should use any data to say what's preferred with stimulus or government policies because it's counter-factual. All one can do is look on whether the implemented policy met it's goals (which need to be stated at the outset). This implemented policy did not.
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Just because there is only one person in your party doesn't mean you don't toe that party's line. If there were 100 Ron Pauls, then would there be a Ron Paul party?
What do you use to support your position that a government non-response to the recession would've been the way to go? Is it just theory based, or are there historical examples?
This doesn't really make sense. Here's why: our system is a two party system. You don't hear me complaining about someone toeing the socialist party line. As for Ron Paul, I like him. I think he would have made a great President. That said, he's one man. You'd need 100s of Ron Paul's to institute Ron Paul-like policy. Further, I don't think I would always agree with "Ron Paul" policy. But, that's for another thread.
Well, all I can say is we tried government response. We were told that it would get unemployment down to 5.6% by now (with no alterations to the labor force participation rate). We know there's been huge alterations to the labor force participation rate, and yet unemployment still hovers at 8.2%. We were also told by those touting the stimulus that if we did nothing we'd have an unemployment rate at around 6% right now. I'd prefer that 6% to 8.2%. But, I know "we don't know what would have happened". We do know what we did (stimulus) and how it panned out - not well (it fell way, way short of it's goals).
So, why do I arrive at "no stimulus"? Well, for one, I look at what I just said - the stimulus was a failure. I also look at history. In the Great Depression, we enacted stimulus as well and in my opinion it prolonged the Depression - I'm not alone there. The problem is we're in the same situation - in terms of a severe economic decline. I will not say that stimulus can't ever work. What I say is in the long run it's a net loss almost every time. The only time I do think it can work with a potential net gain is when the government has enough money and it's a very minor recession. Still even in those cases, I'd advise not to allow the government to step in because once the government does this, they feel like they can always save the day. To me, government is very, very stupid. They mean well, but they f things up constantly... so, even when they could help (in the shortest of short recession, where they have plenty of money - no debt)... why bother giving them the keys to the car? They'll just get greedy. In semi-sustained real recessions (like the one we have now), government involvement leads to more problems.... particularly when they have a debt problem.
Our economy is a function of Consumption (private), Investment (capital spending), Government and Trade. Our economy is really a function of Consumption. Consumption is dependent on money. Money is dependent on jobs. Jobs are dependent on expectations. When the government involves itself - it says to the average employer (or even consumer) we're in bad shape. This, in my opinion, alters expecations to the downside.
There's many more reasons, but I'll shoot out two more:
1) Government needs money and the stimulus costs money. In a debt-driven downturn, the worst thing the government can do is dig itself deeper into debt. It really is the equivalent of spending more on credit cards (debt) while taking paycuts (GDP declines). It's not only nonsensical, it's wrong. Further, government rarely creates lasting jobs in these downturns. Each time government involves itself - cash for clunkers for example, there's an upturn for sure, but then there's "pay back". That means, on the back end, there's a decline to make up for that upturn. This whole thing fucks with expectations.... and prolongs the recession/depression.
2) This problem was semi-contained in the private sector. Don't get me wrong, if I had my way and my ideology was running congress, it would have been more contained - because I don't like government involvement in the private market. But, even so, it was semi-contained in the private sector. The Great Depression showed that once government gets involved, there's a debt-deflation scenario that plays out. Debt/GDP becomes the preeminent statistic because it's a debt-driven recession. My point is don't allow your government to fall prey to that.
There's a lot more, but that's where I'm leaving it for now.
Now, back on topic. This thread's purpose wasn't to state:
inlet's idea for non-stimulus is going to get GoBeavers to agree. I know you won't. But, if you can honestly look at that chart. And say the stimulus was a success (based on their own measures of success)... you are just plain wrong.
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Thanks, glad you dig it.
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How economists get tripped up by statistics
http://blogs.reuters.com/felix-salmon/2 ... tatistics/
Great article... and it strengthens my points throughout this thread.
Keynesian economists tend to use "models" to say how a policy (in the case of the thread - the stimulus) will or won't alter some independent variable (in the case of the thread - the unemployment rate). In order to forecast, you certainly have to do such - which is what the Obama administration did. You also would need a ton of assumptions - which is what the Obama administration used.
The whole point of the thread is to say how wrong their "modeling" was, now that we've seen the results. And their modeling and the data associated was what was used to gain public support for the stimulus. Your article echos that fact explaining that economists have a tough time getting consistent analysis from consistent regression output. To me - that's speaks of bias which is instilled. This is sort of what I was saying to Drifting just in a different way.
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