How Stimulus Fails

A case study of federal waste in Silver Spring, Maryland

It’s not hard to make the case that President Barack Obama’s $840 billion stimulus was a failure. The economy, which was supposed to recover as a result of the massive spending, has largely remained in the doldrums. The administration’s prediction in the event that the stimulus didn’t pass—an unemployment rate of 8.8 percent—was exceeded within two months of February 2009, when the bill was signed into law. (At the time, the total cost was said to be $787 billion; that figure was later adjusted upward by more than $50 billion to align with the president’s budget.) Democratic dead-enders claim this laughably inaccurate employment projection was based on a lack of knowledge about how lousy the economy really was. They tend to overlook another broken stimulus promise: that 90 percent of the jobs “created or saved” would be in the private sector. In fact, the biggest beneficiaries of stimulus funds have been public school teachers.

These big-picture truths paint a picture damning enough. But to better understand the fallacies of stimulus economics, it helps to take a close-up look at how the money was spent. To capture such a cross-section of stimulus reality, reason.tv went to Silver Spring, Maryland, a suburb of Washington, D.C., that is home to many government contractors and other recipients of money earmarked for the “shovel-ready” projects that were supposed to bring the economy back to life.

The ground rules for stimulus dollars, as laid out by Obama’s top economic adviser at the time, Larry Summers, were based on the insights of legendary 20th-century economist John Maynard Keynes. The funds were to be “targeted” at resources idled by the recession, and the interventions were to be “temporary” and “timely,” injected quickly into the economy. 

None of that turned out to be true. “Even if you were to believe that government spending can trigger economic growth,” says reason columnist Veronique de Rugy, a senior research fellow at George Mason University’s Mercatus Center, “the money is never spent in a way that’s consistent with the conditions laid out by the Keynesians for it to be efficient.”

Infrastructure

The first stimulus project in the nation to get shovels into the ground was the resurfacing of Maryland’s Route 650. One reason for the quick turnaround: The job consisted of routine road repairs. That would prove typical of stimulus expenditures.

Obama said the stimulus would put nearly 400,000 people back to work rebuilding America. But in the year after the stimulus was passed, the U.S. construction industry shed about 900,000 jobs, or 14 percent of its work force. The industry still hadn’t recovered two-and-a-half years later.

In Maryland, the “specialty trades,” a subset of the construction industry that handles big infrastructure projects, have lost an estimated 8 percent of their work force since the stimulus was passed, amounting to 8,000 jobs. Against that backdrop, the state’s Department of Transportation says stimulus money for transit projects has paid for the full-time salaries of about 600 construction workers since the middle of 2009.

(Article continues below video.)


Why didn’t Maryland’s $771 million in stimulus outlays for transit infrastructure have a bigger impact on the local economy? Partly because Gov. Martin O’Malley cut his own infrastructure budget more than enough to offset gains from the stimulus. Maryland’s Transportation Trust Fund generally pays for highway repairs by collecting a special gas tax and other user fees. After the stimulus money was made available, O’Malley raided the trust fund, diverting $861 million during the next three years to help balance the state budget, according to information provided by Maryland’s Department of Legislative Services. Even with the stimulus, state spending on transit infrastructure has seen a net decrease of $90 million since 2009. 

That sort of scenario played out all across the country. Stimulus dollars were used to cover general expenses rather than activating idle resources.

Government Contracts

A particularly ineffective way to put idle resources back to work is to give money to big government contractors to do more of what they’re already doing. Yet that’s what happened in downtown Silver Spring. 

Just three firms—Synergy EnterprisesSenior Service America, and Social & Scientific Systems—pulled down more than half of the $138 million in stimulus grants paid to 46 organizations in Silver Spring. While they were receiving a combined $71 million in stimulus, these companies were raking in another $702 million in other government contracts, according to USASpending.gov, a government website that comprehensively tracks federal  spending. The stimulus money was simply a bit more of the same, not exactly a recipe for jolting the economy into action. 

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  • Agriculture is like "stimulus"||

    Works for a little while, makes an arid desert of once green lands.

  • ||

    yes because the plains of the US might as well be the Sahara?

    Seriously, pass whatever your smoking because it's clear you live in a fantasy world.

  • Dust Bowl||

    Dust Bowl. Ever read any history, monkey boy?

    Ever read anything about the rate of desertification in the American west?

    Fibertard Idiocracy.

  • ||

    "Agriculture is widely recognized as causing a huge loss in lifespan for 1000's of years, "

    From YOUR link

    http://en.wikipedia.org/wiki/Life_expectancy

    Bronze Age and Iron Age[11] 26
    Classical Greece[12] 28
    Classical Rome[12] 28
    Pre-Columbian North America[13] 25-30
    Medieval Islamic Caliphate[14] 35+
    Early Modern Britain[11][18] 25-40
    Current world average[21] 67.2 2010 est.

    You so mad you can't even see your own link proves you're a liar.

    BWAHAHAHAAHAH

    What kind of fucking idiot posts a link that proves they lie? Hoe fucking stupid are you?

    BWAHAHAHAAHAHAHAHAHAHAHAHAHAHH

    Now get mad and reply.

  • KPres||

    That was agriculture before Capitalism. Once you add capitalism, the lifespan skyrockets.

  • By your argument, CUBA=better||

    check your health statistics on Cuba

    get back with me if you still think you're correct

  • By your argument, SWEDEN=best||

    Welcome to the utilitarian socialist fold, Fibertarian.

  • Sevo||

    By your argument, SWEDEN=best|3.13.12 @ 1:25PM|#
    "Welcome to the utilitarian socialist fold, Fibertarian."

    So you admit to lying and now try to change the subject?

  • KPres||

    ""By your argument, SWEDEN=best""

    Also, once you correct for deaths from injuries (such as auto accidents), treatment for which are mandated in every developed country, the US has the highest life expectancy in the world.

  • KPres||

    "By your argument, SWEDEN=best"

    No, idiot. In 1965, before they went Social Democrat, Sweden was the second-richest country. Since then they've fallen off, but their relatively high standard of living is a result of their decades of purer capitalism before that.

  • KPres||

    edit:

    "...second-richest country in the world."

  • KPres||

    "check your health statistics on Cuba"

    BWAHAHAHAHAHAHAH!!!!

  • Zeb||

    Cuba needs capitalism too.

  • KPres||

    Nah, all they need is to show Michael Moore the hospitals that high-ranking government officials get to stay at while concealing the cess-pools everybody else gets treated in. Then fudge the statistics and voila, you have a prosperous country in the eyes of everybody who's never been there.

  • Infant mortality||

    but but but MEEEE!

  • Deja Moo||

    "Agriculture is widely recognized as causing a huge loss in lifespan for 1000's of years,"
    From YOUR link
    http://en.wikipedia.org/wiki/Life_expectancy

    Odd. I went to that link and it didn't mention the word agriculture.

  • Dimwit Fibertard||

    Neolithic = agricultural revolution.

    It's time to read something harder than Dr. Seuss.

  • you're a moron||

    "Neolithic = agricultural revolution."

    "Agriculture is widely recognized as causing a huge loss in lifespan for 1000's of years"

    So, if agriculture started in the Neolithic, and lifespan has increased like you claim, then you're saying he's right and you're a liar.

    Dumbass.

  • Neolithic=big lifespan drop||

    but go ahead and call white black and black white

  • doesn't change anything||

    But, if agriculture started in the Neolithic, and lifespan has increased like you claim, then you're saying he's right and you're a liar.

    "Agriculture is widely recognized as causing a huge loss in lifespan for 1000's of years"

    You're STILL a Dumbass and wrong.

  • Deja Moo||

    Neolithic = agricultural revolution.
    It's time to read something harder than Dr. Seuss.

    You put this in quotes: "Agriculture is widely recognized as causing a huge loss in lifespan for 1000's of years,"
    and then directly below it you wrote,
    "From YOUR link
    http://en.wikipedia.org/wiki/Life_expectancy
    "
    Those words are not used on that page.

    But you aren't looking for an honest discussion because you aren't an honest man. You would be just as happy making pro-agricultural claims on a primitivist site.

  • no they aren't asshole||

    "Those words are not used on that page."

    Never said they were dumbfuck, that a direct post to HIM quoting HIM.

    Your idiot ass ASSUMED they would be in that link, that's on YOU. YOU.

    "But you aren't looking for an honest discussion "

    NO ASSHOLE, I WASN'T I WAS HAVING FUN AT THAT ASSHOLE'S EXPENSE AND YOU MISUNDERSTOOD WHAT WAS GOING ON AND MADE A FOOL OF YOURSELF.

    Fuck off now.

  • Deja Moo||

    "Those words are not used on that page."
    Never said they were dumbfuck, that a direct post to HIM quoting HIM.
    Your idiot ass ASSUMED they would be in that link, that's on YOU. YOU.

    I assumed only that you wrote it as you meant it, but because you can't handle standard english writing structure that puts it on me. Nice to know.

  • fuck off now||

    "I assumed "

    And we're done on that admission.

    "you wrote it as you meant it"

    I did, correctly.

    It's a quote, in quotation marks followed by a link, followed by a list of facts from the link that refute the original quote.

    "but because you can't handle standard english writing structure "

    Quotation, followed by link, followed by facts, followed byt exposition. It's temporally correct in every way.

    It's not my fault you were too fucking stupid to notice it was a quote, then proceeded to make an ass of yourself defending your 2nd grade level reading skills.

    Get a tutor motherfucker.

  • Deja Moo||

    Get a tutor motherfucker.

    Too funny. This from a guy who can't get it through his head that I'm not rather. And won't admit that he misquoted the site.

    Please have a great afternoon.

  • fuck off now||

    "And won't admit that he misquoted the site"

    You were already told, it was a quote specifically to him from a previous conversation.

    You also already admitted you assumed, and were wrong.

    You have once again demonstrated you have piss poor reading comprehension, and hate me for pointing it out.

    Yes, run away now, realizing you made a fool of yourself and had to resort to repeatedly lying.

    BYE RATHER!

  • Deja Moo||

    BYE RATHER!

    With observation-deduction skills like that, in a hunter-gatherer society, you'd be feeding the soil at a young age.

  • fuck off now||

    "See the difference yet?"

    Um, I really hate to break it to you, seeing as this was something you were so sure of, but, that was the OTHER guy.

    You've been banging on me for something someone else posted.

    Seriously.

    I'm just amused that you would go on such a defiant rant about lying, and you didn't even bother to confirm it was the person you were talking to.

    Thanks, it's really rare to see that kind of gross stupidity.

    It was someone else BWEAAHAHHAAHHA.

    "Like the dinosaurs you are: Literally too stupid to live."

    Are you sure you're talking to the right guy, tyrannosaurus wrong?

    BWAHAHAAHAHAHAHAHAHAHAHAAHA

  • Deja Moo||

    So now you're claiming there's two of you handle-meanderers? You certainly were writing for him. That's OK, if you want to talk about making sure of something, you're wrong about calling me "Rather."

    Have a nice day!

  • ||

    "But you aren't looking for an honest discussion"

    Fuck you rather.

  • Deja Moo||

    "But you aren't looking for an honest discussion"
    Fuck you rather.

    I am not rather. I've never been rather. Or put another way...
    I rather not.

  • fuck off now||

    "I am not rather"

    yes you are

  • Deja Moo||

    "I am not rather"
    yes you are

    Seriously, I'm not. Nor am I that poser Wipe Injun, whether he's Rather or not.

  • fuck off now||

    "And won't admit that he misquoted the site"

    You were already told, it was a quote specifically to him from a previous conversation.

    You also already admitted you assumed, and were wrong.

    You have once again demonstrated you have piss poor reading comprehension, and hate me for pointing it out.

    Yes, run away now, realizing you made a fool of yourself and had to resort to repeatedly lying.

    BYE RATHER!

  • Deja Moo||

    BYE RATHER!

    Like the dinosaurs you are: Literally too stupid to live.

  • fuck off now||

    "See the difference yet?"

    Um, I really hate to break it to you, seeing as this was something you were so sure of, but, that was the OTHER guy.

    You've been banging on me for something someone else posted.

    Seriously.

    I'm just amused that you would go on such a defiant rant about lying, and you didn't even bother to confirm it was the person you were talking to.

    Thanks, it's really rare to see that kind of gross stupidity.

    It was someone else BWEAAHAHHAAHHA.

    "Like the dinosaurs you are: Literally too stupid to live."

    Are you sure you're talking to the right guy, tyrannosaurus wrong?

    BWAHAHAAHAHAHAHAHAHAHAHAAHA

  • Deja Moo||

    So now you're claiming there's two of you handle-meanderers? You certainly were writing for him. That's OK, if you want to talk about making sure of something, you're wrong about calling me "Rather."

    Have a nice day!

  • you're a moron||

    there hasn't been ANY loss of life expectancy from ANY source AT ALL over "1000's of years".

    you really need this explained fuckwit?

  • Fibertarian Liar - Again||

    Upper Paleolithic - total age 54

    Neolithic (agriculture) drops to 20

    Early Modern Britain 25

    Real nice that agricultural revolution, eh?

  • Swedish Chef||

    I like the Libertarian argument that utilitarian measures of life, such as life expectancy, are the best measure of politics.

    Since the capitalist US sucks at so many utilitarian measures, we can therefore conclude that capitalism sucks a green weenie.

  • ||

    You so mad you can't even see your own link proves you're a liar.

    BWAHAHAHAAHAH

    What kind of fucking idiot posts a link that proves they lie? Hoe fucking stupid are you?

    BWAHAHAHAAHAHAHAHAHAHAHAHAHAHH

    Now get mad and reply.

  • ||

    How do you know what average life expectancy for Paleolithic man was? Do you have a time machine?

    If so, can I borrow it? There's a few people I'd like to go back and...take care of.

  • ||

    "Fibertarian Liar - Again|3.13.12 @ 1:27PM|#

    Upper Paleolithic - total age 54"

    YOUR link

    "Upper Paleolithic 33"

    You so mad you can't even see your own link proves you're a liar.

    BWAHAHAHAAHAH

    What kind of fucking idiot posts a link that proves they lie? Hoe fucking stupid are you?

    BWAHAHAHAAHAHAHAHAHAHAHAHAHAHH

    Now get mad and reply.

  • ||

    "Fibertarian Liar - Again|3.13.12 @ 1:27PM|#"

    At least you're honest about yourself in your sig.

    BWAHAHAHAAHHAHAHA

  • Laugh, Fibertard, Laugh||

    it's your most effective argument for your fellow fools

  • ||

    "Laugh, Fibertard, Laugh"

    Yes, at YOU!

    And you hate it!

  • Deja Moo||

    You're lying. See the simple facts of what the site says, below.

    At least you used to give the pretense of telling thing as you really see them. Now you carefully misquote.

  • ||

    "You're lying."

    Straight from the source asshole, fuck off now.

  • Don't cherrypick, Fibertard||

    It's naughty.

  • ||

    look who's mad about getting caught lying!

    BWAHAHAHAAHAHAHAAHAHAHAHAA

  • ||

    "Don't cherrypick, Fibertard"

    "Oh, so I can't cherrypick"

    BWAHAHAHAHAAH YOU ADMIT YOU CHERRYPICKED BWHAHAHAHAAHAHAHAAH

  • ||

    deja moo = rather = white indian

  • Deja Moo||

    deja moo = rather = white indian

    Is my writing really that bad?
    Damn, I hope not.

  • ||

    "Is my writing really that bad?"

    Yes, it's obvious.

  • Deja Moo||

    "Is my writing really that bad?"
    Yes, it's obvious.
    "Is my writing really that bad?"
    Yes, it's obvious.

    As my handle implies, I've seen this bullshit before.

  • fuck off now||

    Those words are not used on that page."

    Never said they were dumbfuck, that a direct post to HIM quoting HIM.

    Your idiot ass ASSUMED they would be in that link, that's on YOU. YOU.

    "But you aren't looking for an honest discussion "

    NO ASSHOLE, I WASN'T I WAS HAVING FUN AT THAT ASSHOLE'S EXPENSE AND YOU MISUNDERSTOOD WHAT WAS GOING ON AND MADE A FOOL OF YOURSELF.

    Fuck off now.

  • Deja Moo||

    Learn English, then you won't be misunderstood.

    I would have left for the day already except I'm curious... Why do you want so badly for me to go away? Because I caught you lying about the listed life expectancies?

  • fuck off now||

    "Learn English"

    I did, and used it correctly.

    It's a quote, in quotation marks followed by a link, followed by a list of facts from the link that refute the original quote.

    "but because you can't handle standard english writing structure "

    Quotation, followed by link, followed by facts, followed byt exposition. It's temporally correct in every way.

    It's not my fault you were too fucking stupid to notice it was a quote, then proceeded to make an ass of yourself defending your 2nd grade level reading skills.

    "Why do you want so badly for me to go away? "

    I don't, learn your epithets.

    Get a tutor motherfucker.

  • fuck off now||

    "Because I caught you lying about the listed life expectancies?"

    You didn't actually, what I posted is factually correct and backed up by the link.

    You just lied about someone else lying because you can't read a fucking table

  • Deja Moo||

    You just lied about someone else lying because you can't read a fucking table

    Cut and pasted directly from your message 3.13.12 @ 1:27PM:
    "Early Modern Britain 25"

    Cut and pasted directly from the table:
    "Early Modern Britain[11][18] 25-40"

    See the difference yet?

  • fuck off now||

    "See the difference yet?"

    Um, I really hate to break it to you, seeing as this was something you were so sure of, but, that was the OTHER guy.

    You've been banging on me for something someone else posted.

    Seriously.

    I'm just amused that you would go on such a defiant rant about lying, and you didn't even bother to confirm it was the person you were talking to.

    Thanks, it's really rare to see that kind of gross stupidity.

    It was someone else BWEAAHAHHAAHHA.

  • Confusius Say||

    Fuck off now.
    "Why do you want so badly for me to go away? "
    I don't, learn your epithets.

    fuck off - interjection (vulgar, slang) Go away! Get lost!

    Looks to me like he got that one right.

  • Deja Moo||

    Upper Paleolithic - total age 54
    Neolithic (agriculture) drops to 20
    Early Modern Britain 25
    Real nice that agricultural revolution, eh?

    Nice cherry picking! It actually says for Upper Paleolithic, "At age 15, life expectancy an additional 39 years (total age 54)." Early Modern Britain is not shown as 25, but as 25 to 40. Hell, as of the 1500s it shows a 21 year old as having 50 more years to go, for a total age 71.

    Now, if you want an honest discussion on how various diets treat the human body and why, I'm all for it.

  • Oh, so I can't cherrypick||

    ...but you can.

    Neat, fibertard.

  • ||

    "Oh, so I can't cherrypick"

    NO YOU SAID SO YOURSELF BWAHAHAHAAHAH

    "Don't cherrypick, Fibertard"

    BWAHAHAAHHAHAAHHAAHAHAH

  • KPres||

    Seriously, that's your answer?

  • Deja Moo||

    Oh, so I can't cherrypick ...but you can.
    Neat, fibertard.

    Nice, except I'm not exactly a libertarian, and I wasn't cherrypicking, I was correcting your lies about what the page you cited said.

    Have a lovely day. Come back when you're feeling better.

  • Cuba has less infant mortality||

    Therefore, Cuba has a better political system.

    That is, if we're to follow Fibertarian logic in their arguments with WI.

  • ||

    "Cuba has less infant mortality"

    No they don't, they measure it differently.

    You really didn't know that? Only retards use that argument because even it's previous supporters realize how farcical it is.

    I can't believe you didn't know that

    BWAHAHAAHAHAHAHAHAHHAA

  • Cite?||

    How do they measure it differently?

  • ||

    They measure pre-delivery termination differently than we do.

  • ||

    Another example

    The primary reason Cuba has a lower infant mortality rate than the United States is that the United States is a world leader in an odd category — the percentage of infants who die on their birthday. In any given year in the United States anywhere from 30-40 percent of infants die before they are even a day old.

    How does this skew the statistics? Because in the United States if an infant is born weighing only 400 grams and not breathing, a doctor will likely spend lot of time and money trying to revive that infant. If the infant does not survive — and the mortality rate for such infants is in excess of 50 percent — that sequence of events will be recorded as a live birth and then a death.

  • ||

    that's from overpopulation dot com but the spam filter won't let it through

  • J_L_B||

    If you were born in Cuba, you would have to endure nightly broadcasts of Dear Leader's eight hour speeches.

    Is living a long life really a positive at that point?

  • the myth of the noble savage..||

    If the primitivists wish to dismiss all of history as a decline towards the monolithic ogre of civilisation, then that is of course up to them. What is quite clear, however, is that their movement has no merit either as an abstract critique or as a recipe for revolution. In the former sense, it lacks any significance. In the latter, it is a recipe for misery, suffering, and death.

    http://propertyistheft.wordpre.....imitivism/

  • Sparky||

    If I could have just one wish come true, it might be my wish that creative writing courses taught creative ways of reducing word count.

    IOW, tl;dr.

  • Destrudo||

    Oh you don't have the direct neural upload app? Sux bro.

  • Sparky||

    I am the 99%

  • anon||

    I need to get one of those.

  • ||

    "But to better understand the fallacies of stimulus economics, it helps to take a close-up look at how the money was spent."

    Incorrect - there is no need. The fallacy is that government spending can ever stimulate the entire economy into a real recovery.

    The government drag on the economy is the net-present-value of its expenditures, minus transfer payments. In other words, the more a government spends, the slower the economy moves.

  • anon||

    They assume it's the same as taking out a loan to open a business.

    Unfortunately, when government takes money from the taxpayers to spend on projects that nobody else would willingly pay for, nobody wins.

  • "Not willing to pay for" LOL!||

    roads
    schools
    hospitals

    Yeah, nobody wins with those things.

  • anon||

    That's why progress in education skyrocketed when the Federal Government started subsidizing it.

    Oh wait.

  • Dylan||

    What percent of the budget are roads, schools, and hospitals?

  • Dylan||

    What happened to prices in medicine when the government started subsidizing it?

  • anon||

    I dunno specifically, but the 3 departments in their entirety get about 6 percent of the budget.

    6 percent.

  • ||

    And when the Federal government builds a road, school, or hospital, how many times more expensive is it than if a private company did it? Or even a city or state?

    How much money actually makes it through the bureaucracies, unions, crony contractors, and assorted B.S. to the road?

  • Show me a civilization w/o GOV||

    Never has happened in all of history.

    Never will happen either.

  • anon||

    Libertarians don't promote no government.

    Cool how you can't even keep your retarded talking points straight though.

  • Fibertard talking point||

    "Libertarians don't promote no government."

    GOVERNMENT FOR ME!
    BUT NOT FOR THEE, suckah!

  • Tak Kak||

    The Tiv, the Santals, the Nuer...
    definintely has happened for much of history no less.

  • Fibertard oops!||

    Most of human history has been non-State society, but there has never been civilization (settlements of 5000+) without government.

    Words have meaning.

    The great non sequitur committed by defenders of Civilization, is to leap from the necessity of society to the necessity of Civilization.

  • Tak Kak||

    Try reading before typing.

    The Tiv had hundreds of thousands of people, same for the Neur.

  • Strawman||

    STOP BEATING ME!

  • My dartboard says non-sequitur||

  • Deja Moo||

    What percent of the budget are roads, schools, and hospitals?

    Just a quick search, but "Transportation Ifrastructure: 3%" and "Education: 3%" according to "Policy Basics: Where Do Our Federal Tax Dollars Go?" http://www.cbpp.org/cms/index.cfm?fa=view&id=1258

    I don't see anything about hospitals.

  • anon||

    I think the fed govt only makes you show the "need" for a hospital before building one; thus making it actually inhibit the construction of hospitals.

  • Health and Human Services||

    "nothing about hospitals"

    Because you're Fibertarian.

  • ||

    Most HHS dollars don't go towards the construction of hospitals.

  • ||

    We don't need hospitals, we have health and human services.

  • Deja Moo||

    "nothing about hospitals" Because you're Fibertarian.

    By all means, go dig out the data and present it. I only said a quick search turned up two facts, but not the third.

  • fuck off now||

    fuck you rather

  • Deja Moo||

    fuck you rather

    This is getting to be a hobby!
    No thanks dude, I prefer women who can think.

  • fuck off now||

    "See the difference yet?"

    Um, I really hate to break it to you, seeing as this was something you were so sure of, but, that was the OTHER guy.

    You've been banging on me for something someone else posted.

    Seriously.

    I'm just amused that you would go on such a defiant rant about lying, and you didn't even bother to confirm it was the person you were talking to.

    Thanks, it's really rare to see that kind of gross stupidity.

    It was someone else BWEAAHAHHAAHHA.

    "Like the dinosaurs you are: Literally too stupid to live."

    Are you sure you're talking to the right guy, tyrannosaurus wrong?

    BWAHAHAAHAHAHAHAHAHAHAHAAHA

  • ||

    So White Indian is accusing other people of being rather?

  • ||

    Teh ROADZ! DRRRRINK!

  • Brian||

    Again, the government gets credit for doing something positive, without ever having to show that it's better than the alternative. We're all supposed to assume there would be no roads, and schools, and hospitals, without the government. That's the great part of getting government involved with everything. Politicians can act as though the entire civilization depends on them.

  • Market Fundamentalism||

    Again, the "market" gets credit for doing something positive, without ever having to show that it's better than the alternative. We're all supposed to assume there would be no roads, and schools, and hospitals, without the "market." That's the great part of getting business involved with everything. Busy bodies can act as though the entire civilization depends on them.

  • Brian||

  • Brian||

    It appears that, in this case, the "busy bodies" did a lot better than the Great Leap Forward.

  • you communist?||

    Welcome to the fold.

    ~Uncle Mao

  • Brian||

    Actually, I'm pointing out the explosive growth in China's GDP _after_ market-based reforms. Reforms preceded by massive central planning. Hardly an endorsement of Mao. How anyone could observe historical economic data like this and conclude that centralized planning of economies is more efficient and raises the standard of living is beyond me.

  • ||

    These things never existed before the government, I never knew and please explain why so many hospitals are run by churches and not the government.

  • anon||

    Oh the irony:
    It’s not hard to make the case that President Barack Obama’s $840 billion stimulus was a failure.

    (proceeds to write a tl;dr article)

    Please, be more concise next time.

  • Dylan||

    Even if the stimulus had been a "success", i.e. stimulating job growth and investment, it still would have been a bad thing.

    Jobs and investment don't automatically increase productivity or raise the standard of living. They only do so to the extent that they are wise business decisions.

    Congress critters spending other people's money don't make wise business decisions. They just distort the market and blow up more bubbles.

  • robc||

    THIS

  • o3||

    so the ~40% of the stim which is the payroll tax cut was a failure?

    this should be entertaining

  • ||

    Show me the Keynesians on H&R who think TEMPORARY tax cuts are a good way to bring about economic growth.

    Also, the payroll tax cut wasn't in the stimulus bill, that was passed later on as part of the agreement to extend the income tax rates at current levels.

  • o3||

    but the estimated value of the payroll tax cuts ARE INCLUDED in the total stimulus costs & the GOP meme is the stim was a failure.

    >please explain how any tax cut is a "failure"?

  • ||

    I'd prefer to get back to you being wrong about the payroll tax being part of the stimulus.

  • o3||

    ur dodge forces one to deduct 40% fm the total value of the stim which results in ~500 million in stim value.

    now what's the stink about 1/2 billion?

  • ||

    "ur dodge"

    says the guy trying to avoid admitting being wrong the payroll tax cuts being part of the stimulus.

    Let's be clear before this goes any further.

    You're scum and a proven liar, and I have no intention of pretending to any kind of civility towards you.

    I will simply continue to point out you were wrong in response to everything you spew trying to avoid it.

    Now, go ahead and

    TRY MOAR HARDER

  • ||

    Uhh the $275 billion in tax changes is still not the payroll tax that you are talking about.

    Don't you recall the nonsense that was the "Making Work Pay" credit of 2009 and 2010?

  • Barely Suppressed Rage||

    Let's see - the payroll tax pays for Social Security, which we all know is failing. So let's cut the one tax that funds SS. I still don't understand who thought that was a good idea.

  • Scruffy Nerfherder||

    the pollsters

  • robc||

    Two short pages is TLDR?

    ADD drugs are easily available.

  • anon||

    Hey, I was pointing out the irony.

    Also, it doesn't take 2000 words to explain the federal government's inability to stimulate the economy.

  • Sparky||

    ADD is not something that needs to be treated with drugs IMO. The problem is trying to slog through something that probably has some useful information but is fundamentally uninteresting. What are the odds the important parts of this article could have been summed up on only one page?

  • robc||

    It was short enough, there shouldnt have been a page break to begin with, IMO.

  • anon||

    Maybe if he removed the video, I could've read it.

    Either way, if the article were more concise, the point could've been conveyed to more people. I would guess that most people would quit reading once they understood it was a discussion on budget issues either way.

  • ||

    ADD is not something that needs to be treated with drugs IMO

    Show me the bloodwork, MRI, or any other actual physical test indicating the presence of ADD (or ADHD, or whatever they call it), and I'll agree that medication is the best course of treatment.

  • anon||

    It's hard to argue that Adderall and Ritalin don't improve concentration.

    That said, I don't think there's an "attention span problem" to fix.

  • robc||

    Are you denying that speed allows people to concentrate better?

  • ||

    Are you denying that speed allows people to concentrate better?

    No, I'm arguing the need to label as a "disorder" a condition that cannot be objectively tested for then prescribing psychotropic drugs as a "treatment."

  • anon||

    It's a great example of why I quit pursuing a degree in Psychology 3.5 years into it; realized that in general it's a load of shit that would pay less than me doing stuff I enjoy doing more.

  • robc||

    Has anyone here argued the other side?

    I think you are arguing with yourself.

  • robc||

    However, I will argue the other side with an example.

    Last Thursday sucked. After work, I met some friends and had a couple of beers. I felt better.

    I dont think "having a fucking bad day" can be objectively tested but the self-prescription absolutely provided treatment.

    In the same way, people who cant read a 2 page article could use speed to help them.

  • ||

    I dont think "having a fucking bad day" can be objectively tested but the self-prescription absolutely provided treatment.

    But strictly speaking, was your "treatment" necessary? Unwinding after a few beers after a bad day at work is a beautiful thing, but you're hardly "treating" a "disorder."

  • Zeb||

    Nobody says ADD drugs are necessary either (well, some people probably do, but I don't). People could just be less able to pay attention and go through life like that.
    I totally agree with the criticism of psychological diagnoses and the lack of connection to a specific physiological condition. But I don't think that means that you shouldn't try to treat psychological problems. The problem here is a lack of knowledge about how the mind works, not that psychological conditions aren't real. And if you have drugs that can reasonably safely make people happier, smarter or more attentive, why not use them?

  • ||

    I think you are arguing with yourself.

    By golly, you're right.

    Sorry, I just can't seem to focus today!

  • Sparky||

    My point of view is that ADD is actually a net positive and even if there were reliable treatments I would not take them. Sure it's hard to concentrate on things in general but the creative bonuses from having a slightly unhinged mind more than make up for it.

  • anon||

    Sure it's hard to concentrate on things in general

    Ever think that maybe you just aren't interested in most things, hence the lack of concentration on them?

  • Sparky||

    No. There are plenty of things that I find incredibly interesting and I still have trouble focusing for any length of time on. There is a flip side as well though, if I force myself to do it I can concentrate on one thing so fully that my brain will exclude the entire rest of the world. Then the problem becomes breaking away.

  • ||

    My Science! I have ADD and never even realized it.

  • Barely Suppressed Rage||

    What constitutes "tl;dr" for a lawyer is decidedly different than for a non-lawyer.

  • ||

    Well, too me the problem is that repaved all the roads that were as smooth as glass, and didn't repave any of the roads (and there are a bunch) that shake your teeth out of their sockets when you drive on them.
    I am sure there must be some formulation that every little municipality gets a certain share, whether they need it or not. Kind of like anti terrorist training in Fresno, cause if the terrorists get our raisins, the terrorists win...

  • Zeb||

    Oh, good. I'm not the only one who noticed that. I think that they decided to pave the roads first where the most people would see the big "Paid for by the Stimulus" signs.

  • ||

    Here in OKC they repaved streets that were not in terrible condition to begin with. Even though there are no sidewalks, the money required handicapped access, so they build several dozen wheelchair ramps that lead to nothing. In one case, they build it into the side of a hill and it was totally covered after the first rain.

    Sure, government pissing away money stimulates the economy.

  • anon||

    I live in NC and go down to SC on a semi-frequent basis. The main difference I see between the two states is the road condition.

    In NC, the interstate and major highways are CONSTANTLY being worked on. We receive federal funding for our roads due to the emissions program.

    SC has no emissions inspection program, so they don't receive federal funding. The roads are generally a bit older, yet still in the same condition. Additionally, you don't have a traffic jam somewhere all the time because of construction. They also must fix potholes as they pop up, because I rarely see a vehicle-disabling pothole there (a daily encounter in NC).

    tl;dr: federal funding has no impact on road conditions.

  • Tony||

    If top-down management never gets anything right, how come it's almost the universal model for private companies?

  • Lurker Jack||

    Price signals, Tony. Price signals.

  • Redland Jack||

    I think it also helps that they have a fairly simple function to maximize (profit), as opposed to governments which have complex (and competing) goals.
    Private companies tend to be more specialized as well.

  • ||

    If top-down management never gets anything right, how come it's almost the universal model for private companies?

    You are aware, of course, that most companies actually go out of business in relatively short time frames, yes?

  • Tony||

    So you're saying more companies should try the co-op model, or something? Glad we agree that authoritarianism is inefficient in both government and the private sector.

  • ||

    Except you don't seem to agree that its inefficient in the government sector.

    The problems with top-down are less in the private sector because the firms are smaller. And they are self-correcting, because firms go out of business.

  • Scruffy Nerfherder||

    You're missing the point. That is a feature, not a bug.

  • KPres||

    No, totalitarianism can be incredibly efficient in the private sector because the profit/loss mechanism is coordinating the conflicting desires of producers (workers) and consumers (managers). It's just in government where it sucks, because the the conflict between their guns and your desires always has one outcome.

  • Anonymous Coward||

    Because private companies generally don't have the benefit of being able to cover their losses by printing more money.

  • Brian||

    Also, private companies have to actually convince someone to willfully do business with them, while governments can claim success at the mere expenditure of other people's money.

  • Tony||

    Unemployment goes down when demand for labor goes up. Demand for labor goes up when demand for products and services goes up.

    How do austerity budgets and increased wealth concentration (the libertarian solution) effect that?

  • Lurker Jack||

    They allow people that are free to do so to respond to price signals.

  • Tony||

    Care to expand on your vocab words?

    If you care about unemployment it seems you must care about economic demand. If you don't think it's possible to stimulate demand, and thus you think high unemployment is an occasional natural state, then why the constant bitching in these parts?

  • anon||

    Please tell me, how will you stimulate the demand for pottery for the craftsman?

    How will you stimulate the demand for therapy for the psychologist?

    How will you stimulate the demand for pizza for papa johns?

    How will you stimulate the demand for steel for the steelmaker?

    How will you stimulate the demand for precious gems for the jeweler?

    Do you see the problem now with attempting to foster employment growth through stimulus?

    Here's a hint: The people becoming unemployed are of far to many different occupations for you to provide a job through demand for even a fraction of them. It's a byproduct of the division of labor.

  • Tony||

    That's why my solution is simple: transfer wealth downward. A system of labor laws and high taxes on the wealthy that ensure that there is plenty of consumer demand and plenty of public money to make up for any gluts. The market can function just fine--more robustly even--with a more redistributive system. People will make their choices for pizza, therapists, pottery, etc.; the point is they'll have the money to do it with.

  • Sparky||

    So you're not going to get anybody who's unemployed working again, you're just going to give them somebody else's money and hope they spend it right. Then, when everyone has eventually given up their jobs...

  • Tak Kak||

    Artificially elevated consumer demand would reduce dramatically reduce savings. So, no, the market would not function "just fine" it would grind to a halt. (And that's ignoring any problems with labor laws and high taxes)

  • anon||

    That's why my solution is simple: transfer wealth downward.

    That worked so well in Soviet Russia!

    Oh wait.

  • Tony||

    It worked in the United States of Amerika too.

  • GW||

    You are absolutely correct. Cuba does this. The USSR also did it.

  • Barely Suppressed Rage||

    Set the tax rate on "the wealthy" at 80% - 90% and watch tax revenue NOT increase, as those people find ways to not pay the tax - including simply not working that hard.

    Your solution is "simple" all right - as in it must have been thought up by a simpleton. Simple enough for a kindergartner to know it's stupid and for anyone with a basic understanding of human behavior and human motivators, with just a touch of human history thrown in, to know it doesn't work as well as it sounds.

  • Barely Suppressed Rage||

    And it sounds pretty shitty.

  • Tony||

    So taxes can never, ever be raised, ever, and that's called fiscal responsibility?

    Dogma is bad for you.

  • Barely Suppressed Rage||

    So taxes can never, ever be raised, ever, and that's called fiscal responsibility?

    Right, because that's exactly what I said.

    Let's try this: fiscal responsibility is increasing the nation's debt and deficit more rapidly than ever before in the entire history of this country? Fiscal responsibility is increasing government spending beyond the government's ability to pay for it, in an amount greater than all the prior presidents since the beginning of the country have done, combined?

    This is your idea of fiscal responsibility?

    Suck my dogma, asshole.

  • ||

    Says the fucktard that thinks spending can never, ever be lowered.

    Dogma cuts both ways. Idiot.

  • Sevo||

    Tony|3.13.12 @ 12:57PM|#
    "That's why my solution is simple: transfer wealth downward."

    My goodness! Shithead proposes theft as "solution".

  • Brian||

    How in the hell do you boost consumer demand through labor laws and high taxes?

  • EDG reppin' LBC||

    Inflationary. In the short run, people will be glad to have the extra DI. However, with that much easy cash flowing around, prices will increase (too many dollars chasing too few products). Inflation in the mid/long terms will wipe out any short term gains. Try again, though.

  • Brian||

    You'll have to explain this to me again. I've heard Keynesians decribe inflation as the _result_ of consumer demand, and increases in money supply, but not that inflation causes consumer demand. Rather, that consumer demand increases can cause inflation, that, in turn, can put downward pressure on consumer demand. Will you please try again?

  • Brian||

    Oh, I missed your point: labor laws and high taxes increase DI, which increases demand, which causes inflation, which reduces demand.

    I dispute, however, that labor laws and high taxes increase DI.

  • EDG reppin' LBC||

    Hey Brian, I think Tony is saying that labor laws (minimum wage, "living wage") will put more dollars in the pockets of workers. The high taxes on the wealthy will fill the gov't chest with the operating cash necessary to maintain the army, social security, roads, etc.

    In Tony's perfect world, you just give people money, and that money creates demand. No inflation, or other consequences. He is concerned with accounting costs, as opposed to economic costs.

    In Tony's perfect world, the wealthy should be taxed even more to pay for the government that allows them to benefit. It is inconceivable to Tony that wealthy individuals or firms could thrive and be successful without government.

  • Brian||

    And, in Tony's perfect world, you use labor laws to raise wages, and people just make more money and have more purchasing power for consumer goods. This is an incredibly simplistic for the following reasons:

    1. In _some_ cases, this results in laborers with more income.
    2. In other cases, this results in laborers being priced out of the market, and either becoming laid off or unemployed.
    3. In other cases, this results in entire companies going out of business, and some products becoming uneconomically feasible to produce.

    And then you get the almost immediate rise in prices in the goods that those laborers produce, which ripples through the economy in unpredictable ways, effecting supply and demand.

    It's far to simplistic to just assume that the increased disposable income in this situation is sufficient to result in an increase in total consumer demand.

  • J_L_B||

    A system of labor laws and high taxes on the wealthy that ensure that there is plenty of consumer demand and plenty of public money to make up for any gluts.

    You assume this supply is limitless, I assume the wealthy will eventually takes steps to inhibit the transfer of wealth (as any rational person would).

  • Brian||

    I would refer you to the theory of rational expectations. People in an economy just don't reflexively react to an increase in demand. People behave differently when looking at the price signals changing as a function of, say, a new technology coming onto the market that creates a new demand, that has rippling supply and demand changes across the economy, then they do to the government announcing a stimulus package to be spent over a course of a few years in a few specific areas. To think that you will get some equivalent increase in supply-side activity based on drastically different demand scenarios is to not understand the complexity of the economy.

  • anon||

    Also the fact that altering demand alters prices, which affects consumer choice.

  • KPres||

    "If you care about unemployment it seems you must care about economic demand."

    No, dipshit. In the aggregate, demand is infinite (even if it's demand for leisure). Unemployment is a problem with prices. Workers are demanding wages above the market clearing rate in the sector(s) where there's high unemployement (ie, residential construction).

    The solution is to allow the market to restructure, primarily by allowing wages to fall, which drives excess workers (aka producers) to new careers (aka products/services that are in demand).

  • Paul Krugman||

    The solution is to allow the market to restructure, primarily by allowing wages to fall, which drives excess workers (aka producers) to new careers (aka products/services that are in demand).

    Heresy!!!
    Burn the witch!!!

  • Restoras||

    "Austerity budgets", or in other words "spending within your means" is only a libertariain solution by default, since it seems only libertarians are interested in fiscal responsibility these days.

    Wealth concentration as a libertarian solution? That'll need a citation - otherwise it is just another one of your pathetic strawmen.

  • Tony||

    Find me a libertarian who supports raising taxes as part of their vaunted "fiscal responsibility."

  • anon||

    Fiscal responsibility has nothing to do with raising taxes, merely cutting spending.

  • anon||

    You can tax every rich person 100% of their wealth and still not have enough money to run the country for a full year.

  • Tony||

    You can't claim fiscal responsibility and then adhere to a dogmatic approach that has PROVEN to be fiscally disastrous. Fiscal responsibility necessarily entails sometimes raising taxes, because responsible politicians know that constituents will not accept gutting services as much as they will accept tax cuts.

    As for the ridiculous excuse that we can't fill in the entire budget gap by taxing the wealthy, that certainly doesn't mean we should tax them none at all. Recent tax cuts are a huge portion of the budget gap, and will have to be rescinded unless you want to start dismantling Medicare--and I think being "responsible" entails selling that to constituents first. Good luck with that.

  • Tony||

    And I'm for more than the currently rich paying more in taxes--because I want more wealth distributed downward, meaning more people able to pay more taxes. That is the only actual solution to fiscal problems. You can cut government down to a skeleton and the only problem it will have solved is perhaps a line on a balance sheet--while real people's lives will have gotten worse off.

  • anon||

    riiiight, that's why federal spending helped SO MUCH from 1931-45.

    If any policy has proven ineffective, it's massive federal spending.

    Also, by your theory, Soviet Russia should've grown exponentially instead of going broke.

  • Sparky||

    So you take money directly from the rich and give it directly to the poor. Then, after shuffling all the existing money around you take it away from everyone. So how is it that you magically have more money now?

  • Brian||

    One must wonder how any progress was made in this country without a huge Goliath government spending it into prosperity.

  • sarcasmic||

    One must wonder how any progress was made in this country without a huge Goliath government spending it into prosperity.

    According to the Vice President there is no product of any importance that did not come about without government involvement.

    If that guy saw a parade he'd run to the front and act like he was leading it.

  • Brian||

    It also explains why all the politicians come out for the parades when the local, professional athletic team wins the championship. Only through the grace of the governor can the Brave's win the World Series.

  • Barely Suppressed Rage||

    I'm for more than the currently rich paying more in taxes--because I want more wealth distributed downward, meaning more people able to pay more taxes.

    The stupid just piles up in big, fat, gooey rolls. How the fuck do you manage to walk and breathe at the same time?

    So let's see - you want "the rich" (undefined) to pay more taxes, so that the gummint can "redstribute" that wealth to "the poor" (undefined) so that those people can pay more taxes.

    Holy fucking hell, you really are amazingly dense.

    Stop looking to the government as the answer to all of life's problems. It simply is not. Period.

  • Restoras||

    Exactly how would you redistribut the wealth downwards, Tony? Please tell us. I've asked you this before and you have never responded.

  • Sevo||

    Tony|3.13.12 @ 1:01PM|#
    "Fiscal responsibility necessarily entails sometimes raising taxes"

    Surprise! Shithead posts specious claim as "evidence".

  • Barely Suppressed Rage||

    Fiscal responsibility necessarily entails sometimes raising taxes

    Hey, I think I'll apply that to my household budget. I'll just spend way more than my income, and then demand a raise, because the only way my spending can be fiscally responsible is if I take in more money to pay for all of it.

    Or - maybe I could try not spending more than the amount of revenue I take in.

    Nah, fuck that - that would be like HARD and stuff.

  • KDN||

    You can't claim fiscal responsibility and then adhere to a dogmatic approach that has PROVEN to be fiscally disastrous.

    ...

    That is the only actual solution to fiscal problems.

    Lulz.

  • Brian||

    Show me a Socialist who supports lowering taxes as a means to stimulate the economy by increasing the supply of money available for consumer spending. Or, can there be, only one, government that can spend money?

  • Scruffy Nerfherder||

    Find me someone who thinks that if you give more money to the government, they'll spend it wisely and promise to cut back in the future.

  • Sparky||

    That shouldn't be too hard, apparently at least 51% of overs thought that in 2008.

  • Sparky||

    overs voters

    Sometimes not being able to pay attention hurts.

  • fish||

    Those increased taxes won't be used to "pay down" or paygo in the standard Pelosi lexicon debt or the deficit. The increased tax revenue will go into more Solydras or the various General(s) Dynamic that Team Red loves.

    Fiscal responsibility means pissing away less money on useless programs. Professor Hoppe really hurt your feelngs that day in class didn't he?

  • Restoras||

    There is no need for that. We spend too much money - that is all. Why is that so hard for you to accept? Have you seen the economic catastrophy that is unfolding in Greece? Do you really believe that was caused by faulty tax policy? Why is that you beleive the right of the government to spend whatever it wants of the peoples' money is sacrosanct?

  • Brian||

    No, they believe that Greece's problems are caused by austerity measures, as if the problem is that Greece suddenly became fiscally conservative. They avoid the fact that these austerity measures are being forced on Greece by its creditors and neighbors in the EU. When the creditors dry up, the deficit gravy train stops rolling, and you end up with austerity, whether you wanted it or not.

    A country could try not spending itself into oblivion in the first place, avoiding the horrible jolt at the end of the line. But, that requires planning and forethought, and we're too busy making sure that we're stimulating a sufficient aggregate demand.

  • ||

    Why do you hate poor and middle class people Tony? Because that is who you have to really raise taxes on to continue the kind of spending that was started by Bush and continued by Obama.

    It's because we're breeders, isn't it?

  • Redland Jack||

    Even if you believe in the Keynesian Cross, I think there are two potential problems with the current stimulus idea:
    1) The AD/AS model is a short-run model. If the problem is more of a long-term problem (e.g., we haven't been saving enough money, and, since I=S in the long-run, we're experiencing diminished K) than stimulus will push you above Y*, not to a higher equilibrium Y.
    2) As mentioned in the article, it is difficult to spend a lot of money quickly and effectively. Even people who believe that increases in G stimulate the economy to a better equilibrium level of output, concluded long ago (if my recollection is correct), that the best way to deal with a short term shock to the economy is to use monetary policy, which can have huge effects quickly. Fiscal stimulus is just too slow.

  • KDN||

    Tony doesn't actually care about any of your fancy pants Macro talk. He just wants to get on his soapbox and let you know that he deserves to be wealthy more than the wealthy do. Whatever marginal econ education he might have picked up over the years will only be used to further this desire; all other implications and conclusions derived from this study of human behavior are nothing more than religious dogma.

  • ||

    Depends on the time frame you are looking at, Tony.

    In the short run, austerity budgets reduce GDP on a dollar for dollar basis, because GDP includes government spending.

    Over time, austerity budgets reduce the amount of money diverted from the private sector to the government, allowing the private sector to consume more, employ more people, etc.

  • Tony||

    Citation needed.

    State governments have been slashing spending to historic levels and we've yet to see any growth come out of it.

  • ||

    Well, government spending is a component of GDP, regardless of whether the money is taxed or borrowed first. So, by definition, cutting government spending causes a dollar-for-dollar drop in GDP.

    As for austerity budgets reducing the amount of money diverted from the private sector, that's also axiomatic. If the government spends less, it diverts less, either in the form of taxes or capital (which it diverts via borrowing).

  • Restoras||

    "Historic" needs to be something more than what they spent last year.

  • ||

    If you actually read their arguments you'd understand that austerity isn't supposed to bring about immediate economic growth, instead it allows prices to find their level free of government distortion.

    Constant government intervention to prop up prices only prolongs the comedown.

  • Tony||

    In other words, there is no possible way to prove you right, so just trust you. And you're still gonna bitch about high unemployment, even though you think it's just a natural part of the cycle.

  • ||

    Seriously? I think it's pretty obvious that the governments attempts to prop up the housing market have been a disaster. Are you disputing this?

  • fish||

    And you're still gonna bitch about high unemployment, even though you think it's just a natural part of the cycle.

    Everyone is going to bitch about high unemployment including bitches like you! The difference is that most here won't have a hissy and demand more rescue from already failed policies.

  • Matrix||

    governments do not create wealth. They extort it from others. So in order to pay for that government worker, a productive member of society has to pay taxes to support that person. That is fewer dollars the taxpayer has to invest, save, or spend. All three of these help the economy. By investing, you help a company expand their business, which often leads to new jobs. If you save the money in a bank account, that bank will lend your money out to others, who will use it to buy things. In return for your investments or savings, you often make money. If you spend your money on goods or services, you help a company stay in business and provide jobs for people who produce goods or services that people want in exchange for money.

    Extortion disrupts this process and distorts the market.

  • ||

    "governments do not create wealth".
    Demonstrably false. When a government builds a road, it creates wealth. A road is wealth. The money it uses to build the road is not wealth. Money is not wealth, it is a claim against wealth. (Econ. 1a, Remedial).

  • ||

    And the money taken from the private sector to fund the building of the road definitely didn't reduce someone's wealth somewhere else, there's obviously only one side to this transaction.

  • KPres||

    Unemployment doesn't come from a lack of demand for labor, it comes from a lack of demand for labor at the current price level. Wage rigidity and the misallocation of labor resources are the cause of unemployment, not a lack of aggregate demand for products and services (which can only happen if people are choosing leisure > products/services).

  • ||

    If top-down management never gets anything right, how come it's almost the universal model for private companies?

    Accountability, lad. Private-sector entities have to perform to survive. Governments, not so much. Private-sector managers can be fired for non-performance. Bureaucrats, not so much.

  • anon||

    Exactly what I was about to say.

    Most private enterprises don't succeed. The vast majority, in fact.

  • Tony||

    Government "managers" are subjected to regular elections, which is a much more direct check on performance than happens in workplaces, with respect to workers and management. A workplace is pretty much an authoritarian situation.

    I don't see why career government workers are necessarily less accountable than private workers. If anything, they're subjected to constant pressure on budgets and outcomes because of politics. Inefficiencies in government bureaucracy are mostly overstated (and efficiency in the private sector overrated). But I'd need to see real data, not the usual stereotypes.

  • anon||

    Government "managers" are subjected to regular elections,

    No they aren't.

  • Restoras||

    Not to mention the amazing ability of those who are subject to elections to get re-elected.

  • sarcasmic||

    I don't see why career government workers are necessarily less accountable than private workers.

    Wow.

  • ||

    I don't see why career government workers are necessarily less accountable than private workers.

    Google "civil service protections." Also, Google "public sector unions."

    Hard to fire is hard to motivate. Unfireable is unaccountable.

  • Tony||

    So why shouldn't workers be able to fire bad CEOs? At least we have a comparable opportunity with government.

    Such staunch support for authoritarianism in the private sector, when your main grievance in the world is centralized authority. Doesn't make sense. Unions (private and public) are good because they transfer some leverage to workers, and I don't know on which stone it's written that all power should reside in the hands of managers.

    When you get down to it, libertarians are the real power and authority worshipers.

  • anon||

    So why shouldn't workers be able to fire bad CEOs?

    They can, and frequently do. It's called quitting.

  • KPres||

    +1

  • ||

    So why shouldn't workers be able to fire bad CEOs? At least we have a comparable opportunity with government.

    Boards of directors and shareholders do.

    Again, accountability.

  • Tony||

    Yeah, right.

  • ||

    Yeah, right.

    Excellent counterpoint, Tony.

    You're right: knowing that you can be replaced does not instill a sense of accountability. Thank you for spelling that out for me so eloquently. I guess I needed that little "push" to see the light.

  • Sevo||

    Tony|3.13.12 @ 1:17PM|#
    "Yeah, right"

    Surprise! Shithead called on bullshit, tries snark!

  • ||

    Board of Directors do fire CEO's fairly regularly.

  • ||

    Sometimes shareholders fire Directors too.

  • mr simple||

    Are you serious? It's like you're being willfully obtuse at this point. First, there's a world of difference between someone in another city far away from me telling me how to run my life and someone who is paying me to do a job telling me how they want me to do that job. Second, businesses are owned by a person or group of people. They have the power to hire or fire whomever they please. Managers have the power because the people signing the paychecks want them to and the people doing the work get paid to do the work they tell them to do. I hope I've explained this in a way you can understand. It's not difficult, but I can tell you're having trouble with simple concepts.

  • sarcasmic||

    It's like you're being willfully obtuse at this point.

    SOP

  • Brian||

    I hope you're not about to assume Union personhood. Because, we all know how special interests should be regulated out of the political process.

  • ||

    So why shouldn't workers be able to fire bad CEOs?

    For the same reason pubsec employees can't fire the Governor or President?

  • ||

    Government "managers" are subjected to regular elections

    I'm talking about the rank-and-file bureaucrats, the ones who comprise 90 percent of the federal government. They're not subject to reelection. And as union members, many aren't subject to being fired, either.

    I don't see why career government workers are necessarily less accountable than private workers.

    That's why I took the time to explain it to you. Here's hoping you've internalized the lesson.

    Inefficiencies in government bureaucracy are mostly overstated

    Just for shits and grins, here's a story about how the federal government lost - that's lost - 24 billion dollars in 2003:

    http://www.pittsburghlive.com/.....25328.html

    Show me any private-sector company that has ever managed itself that incompetently and survived.

    Please don't use Amtrak as your example.

  • ||

    Government employees are far less accountable than private employers. They are heavily governed by seniority and it's almost impossible to fire most government employees without significant cause or some sort of criminal allegation. Poor performance will not get you fired.

    I had a buddy who got a job at the IRS when he was younger. He spent a month or so there and decided the job sucked and just stopped going in and found another job. A month after he had stopped going he got a letter from the IRS. It told him in no uncertain terms that if he did not come back to work they would be forced to take actions to terminate his employment with the IRS.

    Every private job I have ever had will can you after only two days of no call/no shows unless somebody died. That's because they have a bottom line that has to be met. They can't just talk efficiency, they have to actually practice it.

  • Tony||

    So they fired him, then?

  • Brian||

    The political process for choosing legislators and executives in no way approaches an economic analysis of who is or can manage the economy most efficiently. This is at the heart of why government stimulus is incredibly inefficient. As this article points out, the lofty goals cited through media sounds bites of what a stimulus is supposed to do, contrast starkly to the actual implementation. This is due, mostly, because governments spend other peoples money, never their own, and have power to acquire capital without actually acquiring the confidence of those giving it up. Then, they spend it through a multiple federal-state-local government hierarchy that's goals are more politically motivated than economically motivated.

    This is why looking at a stimulus is much more complex than just assuming aggregate demand increases and clapping.

  • ||

    "Government "managers" are subjected to regular elections,"

    I see you've resorted to openly lying.

    Why do people bother with you again?

  • sarcasmic||

    Resorted? Dude, it's SOP.

  • Barely Suppressed Rage||

    Government "managers" are subjected to regular elections

    No they aren't. Elected officials are, and take a look at how long a lot of the Congress-critters are in there. There is a psychological phenomenon known as incumbent bias, which makes it far easier for an incumbent to stay in office than for the challenger to unseat him. Combined with various campaign finance and balloting laws which favor the incumbent, and you'll find that the notion of elections is not as strong a check as you would have it be.

  • Barely Suppressed Rage||

    which is a much more direct check on performance than happens in workplaces, with respect to workers and management.

    Absolute horse shit.

    The millions of people actually doing the work of the federal government - all the thousands of agencies - are not elected, but career workers, who are protected by all kinds of laws and court decisions that for many of them - particularly management - treat their jobs as "property" that the government cannot take away without due process - making it far easier to fire a private-sector employee than a government worker.

  • Barely Suppressed Rage||

    I don't see why career government workers are necessarily less accountable than private workers.

    Who's holding them accountable? If I'm a small business owner and an employee is fucking up, harming my company, costing me money, I can call him into my office and tell him to GTFO. Done.

    You can't do that with a lot of government employees. And there isn't much incentive for anyone to do so, because they don't have a boss who is flyspecking the budget, operations and the bottom line as if his life depended on it - in a small business, the business owner's life in effect DOES depend on it. For a government agency, it's just more taxpayer money. They can handle a lot more dead wood and waste than a for-profit, private-sector company.

  • Concerned Citizen||

    Here in Columbus, during the debate over Obamacare, a letter to the editor from a retired gov't employee was enlightening. He said they spent their whole day avoiding doing what their agency was supposed to be doing, while making sure their budget was spent by the end of the fiscal year. He was skeptical of Obamacare.

  • Barely Suppressed Rage||

    I used to work for a government contractor, working closely with a couple government agencies. I have never seen so much foot dragging and standing around bullshitting before or since. I still often have to call and speak to government employees, at the state and federal level. The concept of "a sense of urgency" is utterly foreign to most of the careerists. And forget about "customer service." Are there good ones in there? Absolutely, without a doubt, yet. But for the most part, the people answering the phone clearly don't give a flying shit. They've had zero phone etiquette or customer service training - and why should they? You need whatever service they're providing, and they are the only place you can get it, so just suck it up or fuck you.

    You can't have that kind of power in most of the private sector, particularly in small business.

  • Barely Suppressed Rage||

    Inefficiencies in government bureaucracy are mostly overstated (and efficiency in the private sector overrated).

    You don't have the slightest clue what you're talking about. I've seen both up close and personal. Inefficiency in private business affects only the few people employed by or owning that business. Sure, a lot of business are not as efficient as they could be, but that doesn't cost me a thing. That's the problem of the business owner.

    Ineffeciency in the federal government is paid for by the 51% of us who pay all the fucking taxes that run the government. And I have seen tons of government waste up close and personal. Example: to build what essentially was a big two-car garage: $250,000. And that did not include the foundation, which already existed. I could have built the thing with a couple friends of mine, to the same or better build quality, for $25,000.

  • Sevo||

    Tony|3.13.12 @ 12:41PM|#
    "Government "managers" are subjected to regular elections, which is a much more direct check on performance than happens in workplaces, with respect to workers and management"

    Surprise! Shithead posts more lies!

  • KDN||

    It's pretty clear that he has never seen the inside of a corporate office. This is all abstract stuff to him.

    Also, elected officials as managers? Unless speaking of the very top, metaphor fail. They used that metaphor in at least 4 classes I took since 7th grade and yet you've still managed to bungle it. GG.

  • KPres||

    "Government "managers" are subjected to regular elections"

    Correct. Democracy only functions because it tries to mimic a competitive market. But, unlike a market, the minority is still always unsatisfied, making it the inferior form of organization.

  • fish||

    I don't see why career government workers are necessarily less accountable than private workers. If anything, they're subjected to constant pressure on budgets and outcomes because of politics. Inefficiencies in government bureaucracy are mostly overstated (and efficiency in the private sector overrated). But I'd need to see real data, not the usual stereotypes.

    That is primo pure uncut spoof!

    I salute you sir!

  • Brian||

    Lately, Tony, the political process for choosing our next chief executive is primarily focusing on birth control mandates in ObamaCare. How you see the pressure to choose a wise economic leader in this is beyond me.

    How about this for economic data?
    http://en.wikipedia.org/wiki/F.....005gdp.gif

  • ||

    Hey Tony, just so you know: those "managers" who face regular elections are reelected at upwards of 80%. So no, in fact, that is NOT a direct check on performance.

    But then you already knew that, you disingenuous hack.

  • sarcasmic||

    Some Tonyisms:

    Inaction is force.
    Not stealing is giving.
    Not giving is stealing.
    Government can protect private property rights while also giving some people a claim on the property of others.
    Parents only feed and clothe their children because the government tells them to.

    He is a fucking moron and that's all there is to it.

  • ||

    He is a fucking moron and that's all there is to it.

    Tony's not a moron, not at all.

    He simply belongs to a group which believes that no enterprise is valid unless it's operated at the behest of government and administered through coercion.

    It's a mentality that is utterly alien to most of us, and which many of us might understandably mistake for stupidity.

  • sarcasmic||

    Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society. As a result of this, every time we object to a thing being done by government, the socialists conclude that we object to its being done at all.

    We disapprove of state education. Then the socialists say that we are opposed to any education. We object to a state religion. Then the socialists say that we want no religion at all. We object to a state-enforced equality. Then they say that we are against equality. And so on, and so on. It is as if the socialists were to accuse us of not wanting persons to eat because we do not want the state to raise grain.
    -Bastiat
    http://bastiat.org/en/the_law.htm
  • ||

    Socialism, like the ancient ideas from which it springs, confuses the distinction between government and society . . .

    An oldie but goodie. I post this one as my Facebook status every once in a while. Usually gets lots of good comments.

  • anon||

    If only more people had read "The Law," perhaps we wouldn't be in our current conundrum.

  • ||

    He simply belongs to a group which believes that no enterprise is valid unless it's operated at the behest of government and administered through coercion.

    The Statist Fallacy, IOW:

    Everything from the State, nothing outside the State, nothing against the State.

    I believe it was Mussolini who first said that.

  • ||

    "Democratic dead-enders claim this laughably inaccurate employment projection was based on a lack of knowledge about how lousy the economy really was."

    That explains all the hysteria over the coming great depression if something wasn't done.

  • romulus augustus||

    Among people I know, the argument is already taking hold that the economy is finally improving, more jobs are being created, etc. all due to Obama staying the course against the evil Republicans who caused the mess in the first place. 90+% of voters know nothing about economics and many are susceptible to the nonsense put out by the newsreaders each night on network broadcasts. How are a handful of libertarians going to break through with the truth? Maybe the only thing to do is put a simplistic reverse spin on things: the economy is improving because consumer and business confidence is improving because Obama was stopped in his attempt to rescind the Bush-era tax rates, that Obamacare is being challenged by many states and the likelihood is that it will be found unconstitutional, and that job-creators were heartened by the anti-Obama landslide in 2010.

  • Meanwhile||

    OT -- "Jane Fonda, Gloria Steinem Call For FCC to Ban Rush Limbaugh"

    In an editorial on CNN.com titled “FCC should clear Limbaugh from airwaves,” the Women’s Media Center co-founders compared Limbaugh to “sophisticated propagandist Josef Goebbels,” the man who helped promote Hitler’s racist, genocidal policies in Nazi Germany.

    Good times.

  • Concerned Citizen||

    More censorship from the left. Is there anything they stand for that doesn't depend on coercion? And yet, the leftists who oppose censorship won't say a fucking thing against these two.

  • Jane & Gloria||

    It's only censorship when you try to shut us up!

  • Barely Suppressed Rage||

    But that fucking scumbag Bill Maher calling Sarah Palin a twat and a cunt and making jokes about her fucking her daughter's husband is just a-ok. In fact, the President's Super PAC should happily accept his $1 million donation, because he's such a great guy.

    Yeah, and the fucking lying liberals (but I repeat myself) continue to disingenuously claim there's no double-standard.

  • Tony||

    No one whines like a conservative macho man.

  • Y-not||

    Typical for a statist liberal like yourself.

  • ||

    Another example

    The primary reason Cuba has a lower infant mortality rate than the United States is that the United States is a world leader in an odd category — the percentage of infants who die on their birthday. In any given year in the United States anywhere from 30-40 percent of infants die before they are even a day old.

    How does this skew the statistics? Because in the United States if an infant is born weighing only 400 grams and not breathing, a doctor will likely spend lot of time and money trying to revive that infant. If the infant does not survive — and the mortality rate for such infants is in excess of 50 percent — that sequence of events will be recorded as a live birth and then a death.

  • ||

    No no, that can't be right. Tony assures me all the time its because we don't have single payer, government run healthcare.

  • Ron Paul||

    Teal Dear

  • ||

    I was looking for some facts, but this is a snow job...

  • Matt B.||

    You gave the game away with this one:

    "Stimulus dollars were used to cover general expenses rather than activating idle resources."

    What would Maryland, or any other state for that matter, have done if it couldn't cover those general expenses? It would have meant more cuts at the state and local level, which would have made the economic crisis worse by taking more money out of the pockets of lower and middle class citizens most likely to spend it.

    We are just emerging from a recession deepened mainly by lack of demand once people started losing jobs and wages dried up. Without people having the money to buy things, businesses can't sell them, which means they don't really have any incentive to hire anyone. Without the stimulus that problem would have only been worse and the economic downturn more devastating.

    http://conflictrevolutionblog.blogspot.com

  • ||

    There is no acknowledgement here that most economists consider the stimulus to have worked fairly well; that job loss dropped off strongly and continuously as the stimulus went forward; that the stimulus pumped back into aggregate demand about the same amount that was being sucked out by the job losses, thus flattening out the downward death spiral into outright depression; and that there is no alternate explanation for the end of the recession.

  • ||

    The problem is more fundamental than even suggested in this article. All this article talks about is how the benefits of spending the money were less than expected.

    What the article completely misses is that fact that the money that the government spends is not free. It has to come from somewhere and getting it imposes costs. In the case of the stimulus, since the government was already running a deficit before the stimulus was enacted, it is clear that the government borrowed the entire $860B that funded the stimulus.

    Now the cost of the borrowing comes in several forms. The the most severe of this is that the government borrowed the entire $860B, and all of us, our kids and our grand-kids now have to pay $25B a year in interest forever on that loan.

  • ||

    Taxes do not function to raise revenue per se, they function to regulate aggregate demand.

    And nobody's kids have to "pay back" the debt. Are we sending real goods and services made today back to the 1950s to pay back the WWII debt? Do you see the logical mistake your made when you said that statement now?

    You obviously don't know the difference between sovereign debt and non-sovereign debt.

    www.moslereconomics.com

  • ||

    Such an old story as to be boring, almost. Yet the fools who vote for political trash never learn. That story is just as old. At it's heart government is theft.

  • ||

    How Reason.tv fails - A case study in libertarian ignorance of aggregate demand principles in economics.

  • Lee||

    Great column, but really unnecessary because, you see, the stimulus spending is being overseen by Joe Biden, and you know, nothing gets past Joe. (applause line)

  • Snuff||

    It failed because it is not the place of government to print money and inject it into ANY part of the economy. You argue as if it didn't work because they spent it unwisely. This makes you almost as big a part of the problem. Stop printing and spending money!!

  • divorced from reality||

    Amen. Keynesians will argue all day long that the failures of their ideas were due to choosing the wrong targets.

  • ||

    This article should be expanded into a full blow case study and be required reading for all high school students. Let this be the final nail in the coffin for Keynesian stimulus theory. It has never worked, it will never work even if it is implemented 100% according to their stimulus rules.
    Sadly though, the 30% of voters who are ardent, never-to-change liberals will simply dismiss the findings as either irrelevant or incorrect. They will never admit what has been staring them in the face since 2009 and the government-approved media spewed too many lies for too long about all the jobs created or saved that the lie has become truth to the sheeple.

  • matt||

    when you begin an article saying the economy is in the "doldrums" because of massive spending, you lose credibility.

  • Sean M. Smith||

    Another great article on why porkulus failed, but you're thinking too hard. Veronique prefaced a statement, "Even if you were to believe that government spending can trigger economic growth . . ." But the thing is, it can't. Ever. That's just not how economic growth happens. Economic growth comes from INCREASING the amount of wealth, which can only be accomplished either by adding value to something or by combining things of lesser value into something of greater value than the sum total of its component parts. Growth doesn't happen--CAN'T happen--by shifting preexisting wealth around in some clever or not-so-clever way. See: www.estobrevis.squarespace.com.....hayek.html

  • ||

    One more conservative columnist worthy of a Nobel prize in economics. This monopoly liberals seem to have with the Nobel committee really needs to be broken. How about we do like the Chinese and get the Koch brothers to fund our own 'Noble' prizes every year. We could give economics prize to Laffer, Paul Ryan, Ramesh Ponnuru and the 'Noble Peace Prize' to George Bush, Bolton and Rumsfeld. Santorum could get a Noble prize in Creationism

  • RobbyUSAfreedom||

    Damn straight it always goes to the n1333rs s@1cs and other coloreds and they just spend it on drugs and prostitution but what do you expect when one of them is in the white house?

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