Keynesianism

There are economists that believe the stimulus failed, Mr. President

President Barack Obama says that economists from the left and the right agree that the “stimulus” bill has saved jobs. Jake Tapper from ABC News isn’t sure about that:

[C]learly other economists are much more skeptical, including Dan Mitchell at the libertarian Cato Institute, and J.D. Foster at The Heritage Foundation.

Some economists say the whole notion of counting “saved or created” jobs is impossible. Harvard University labor economist Lawrence Katz told ProPublica that trying to count how many jobs have been saved or created is “a silly exercise.”

And in fact, in December the Office of Management and Budget director Peter Orszag issued a directive scrapping the whole “saved or created” construct.

“Instead, recipients will more easily and objectively report on jobs funded with Recovery Act dollars,” Orszag wrote.

Correct me if I’m wrong, but weren’t we told that unemployment would not rise above 8% with the stimulus. Two hundred economists warned the president that he was making a mistake with the stimulus bill and that it would not create new jobs, pointing to lessons from the past. Now we’re over 10% unemployment and things don’t seem to be getting any better.

Americans Reject Keyensian Economics

Once again, there is more common sense on Main Street than Pennsylvania Avenue:

While influential 20th Century economist John Maynard Keynes would say it’s best to increase deficit spending in tough economic times, only 11% of American adults agree and think the nation needs to increase its deficit spending at this time. A new Rasmussen Reports national telephone survey finds that 70% disagree and say it would be better to cut the deficit.

In fact, 59% think Keynes had it backwards and that increasing the deficit at this time would hurt the economy rather than help.

To help the economy, most Americans (56%) believe that cutting the deficit is the way to go.

Eighty-three percent (83%) of Americans, in fact, say the size of the federal budget deficit is due more to the unwillingness of politicians to cut government spending than to the reluctance of taxpayers to pay more in taxes.

Now if we could only get some of that wisdom to Washington.

Majority of Americans believe stimulus bill was a bad idea

My apologies for posting so much about polls the last few days, but much of what is coming out is showing voters’ contempt for much of what has come out of since President Barack Obama took off last year.

Last year during the Obama Administration’s push for a Keynesian-style “stimulus” package, Americans were told that unemployment would not rise above 8% with the stimulus and would surpass 9% without it (see page 5 of the administration’s report, The Job Impact of the American Recovery and Reinvestment Program).

Unemployment is 10% today and jobs are still being lost, so it’s no wonder Americans believe the “stimulus” bill was a bad idea:

Fifty-six percent of people questioned in a CNN/Opinion Research Corporation survey released Sunday say they oppose the stimulus package, with 42 percent supporting it.

Last March, just weeks after the stimulus bill was signed into law by President Barack Obama, a CNN poll indicated that 54 percent of the public supported the program, with 44 percent opposed.

The program, formally known as the American Recovery and Reinvestment Act of 2009, attempts to stimulate the country’s economy by increasing federal government spending and cutting taxes at a total cost to the government of $787 billion. No Republicans in the House and only three in the Senate voted in favor of the bill.

Earlier this month the Associated Press reported that spending on transportation had no measurable impact on the economy, noting “spend a lot or spend nothing at all, it didn’t matter.”

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Second “stimulus” being pushed by Obama

Just after a budget deficit of $1.4 billion and starting off the new fiscal year $292 billion in the red, President Barack Obama is planning to spend more money with the false hope of pulling us out of the recession:

President Barack Obama outlined new multibillion-dollar stimulus and jobs proposals Tuesday, saying the nation must continue to “spend our way out of this recession” until more Americans are back at work.

Without giving a price tag, Obama proposed a package of new spending for highway, bridge and other infrastructure projects, deeper tax breaks for small businesses and tax incentives to encourage people to make their homes more energy efficient.
[…]
He called for more government spending on infrastructure projects such as roads, bridges and water projects and for new tax breaks for consumers who invest in energy-efficient retrofits in their homes. This could be what some administration officials have called a “Cash for Caulkers” program modeled on the now-expired Cash for Clunkers program of tax rebates for people who turned in old cars for more fuel-efficient models.

I was talking to a small business owner last night about. He said tax breaks for small business owners are a necessity. I tend to agree, however, any tax cuts for business need to be broad, not just directed at small business.

Your “stimulus” dollars at work

We all know the jobs “created or saved” by this Keynesian spending are bogus, but

Romer: Stimulus already had biggest impact

Christina Romer, a White House economic advisor, says we’ve already seen the biggest impact from the so-called “stimulus”:

A top White House economist says spending from the $787 billion economic stimulus has already had its biggest impact on economic growth and will likely not contribute to significant expansion next year.

Christina Romer, the chair of President Barack Obama’s Council of Economic Advisers, said Thursday that the $194 billion already spent gave a jolt to the economy that contributed to growth in the second and third quarters of the year. She told a congressional panel that by the middle of next year, the impact of the stimulus will level off. Romer said spending so far has saved or created 600,000 to 1.5 million jobs but warned that unemployment will remain high, above 9.5 percent, through the end of 2010.

So, uh, that’s it? Weren’t we told that unemployment would not rise above 7.9% and that this spending, funded entirely by debt, would create millions of jobs? Well, we’ve lost a lot more jobs than with the stimulus than the Obama Administration said we would. Any talk of job creation from this spending is an empty talking point that isn’t backed by reality.

As you can see below, unemployment is almost 2% higher with the stimulus bill. Since the beginning of the year, a couple millions jobs have been lost.

Sen. Susan Collins: A Democrat in Conservative Clothing

Susan Collins, a “Republican” Senator from Maine, is one of only a handful GOP Senators who might approve the massive spending bill the Democrats and Obama Administration has been pushing the past couple weeks.  My major question: Is she a Republican? After looking at her stances on issues, she seems to be in favor of big government.

Barney Frank: Plenty of rich people that we can tax

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Love him or hate him Barney Frank, Chairman of the House Financial Services Committee speaks his mind with much greater candor than most politicians on Capitol Hill. But the last thing the economy needs is “a healthy dose of Keynesianism” as he stated. Does he not remember when he was in his thirties how John Maynard Keynes’ theories were proven to result in stagflation?


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