3 Fallacies in Obama's Public-Sector Stimulus Strategy

Paying people to do busy work won't revive the U.S. economy.

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Three. The public sector doesn’t just indirectly crowd out private job growth but directly clobbers it as well. That, in fact, is why the regulatory state—the main public-sector enterprise—exists. You can argue that its key products (red tape and mandates) are necessary for public safety, but you can’t argue that they lead to job growth. As the regulatory state grows, the private economy shrinks—and that’s exactly what’s been happening on President Obama’s watch.

Investor’s Business Daily writer John Merline points out that since the post-2008 stimulus, the combined budget of America’s regulatory agencies has grown a healthy 16 percent, topping $54 billion. The overall economy? A paltry 5 percent. Employment at federal regulatory agencies has climbed 13 percent since Obama took office. By contrast, employment shrank by 5.6 percent in the private sector.

Can anyone seriously argue that handing more stimulus funds to more regulatory agencies—something that would inevitably happen given that money is fungible—to hire more bureaucrats to write more regulations will mean more net job growth?

That President Obama can’t see this and naively preaches the stimulus gospel speaks volumes about the liberal bubble that he inhabits. A little ridicule—even by Mitt Romney—is just what he needs.

Shikha Dalmia is a Reason Foundation senior analyst and a columnist at The Daily, where this column originally appeared.

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  • ||

    [Obama's statement] manages to pack in virtually every "progressive" economic fallacy—and then some.

    Perhaps he thinks that's how you get the Nobel Prize for Economics.

  • wareagle||

    Obama's statement on just about anything contains the biggest fallacy of all: that correlation equals causation.

  • Loki||

    Worked for Pauly Krugnuts.

  • Drake||

    All good points. Also - we eventually have to pay for all this waste.

  • Pound. Head. On. Desk.||

    Cambridge is considering a soda ban. http://www2.cambridgema.gov/ci.....m_id=35515

  • Mo' $parky||

    Quite a shocker coming from the People's Republic of Cambridge.

  • Pound. Head. On. Desk.||

    My point is it's spreading.

  • Rich||

    Like peoples' waistlines.

    /Bloomberg

  • ||

    Yeah, I remember when people laughed at the idea that Paris would ever copy NY and ban cigs in cafés.

    Ha fucking ha.

  • ||

    "Yeah, I remember when people laughed at the idea that Paris would ever copy NY and ban cigs in cafés."

    You can still smoke in Paris cafés, but only in the outdoor seating.

  • Raistlin||

    For now.

  • DEG||

    I shudder to think what they'll do to one up Bloomberg.

  • Spoonman.||

    I didn't understand people being angry at Mitt Romney saying "we don't need more teachers".

    We don't. The number if kids in America is not increasing much, if at all.

    It's almost as if commentators will attack based on what they think can score them points with morons rather than what makes sense.

  • Pound. Head. On. Desk.||

    Almost. As. If.

  • anon||

    almost as if

    You don't say.

  • The Hammer||

    I daresay!

  • Bill||

    Progressives believe in magic words and magic classes of people that when uttered always allow them to claim the moral high ground in any argument.

    Their good intentions always make any means they choose correct and anyone opposing them is either evil or stupid or both.

    "old people", " children", "unions", "teachers" - all good any therefore any policy that you BELIEVE will help them is right. No fair going back later to see if the policy really worked.

  • Joe R.||

    I deactivated my Facebook account the other day, because I couldn't handle another 5 months of Team Red/Team Blue stupidity.

  • Bill Dalasio||

    Well, it depends on precisely who we is, doesn't it? If it's the general U.S. public, probably not. If "we" is the political establishment looking for more clients and dependants, then almost certainly.

  • PapayaSF||

    My recent thought: Do cities really need as many firman as they have? How often do they use all of them at once? Is there some objective method of determining the optimum number, and are those methods used?

  • Tim||

    "Paying people to do busy work"
    As concise an explanation of Obama's economic policy as I have ever seen.

  • Whiterun Guard||

    Busy work for busy bodies!

    Also does anyone else find it dead sexy when Shikha gets all economically high and mighty?

  • Bill||

    +1

  • PapayaSF||

    Her economic pieces are fine, better than her immigration pieces IMHO.

  • VG Zaytsev||

    Actually it's not.

    Unless you think of smashing windows as busy work. No, Obama wants to pay people to be actively destructive to the the economy and society.

  • Rubber Nipple Salesman||

    Whether The President realizes it or not,this is the true impetus behind these growth-of-government policies.

  • Whiterun Guard||

    You know who else couldn’t see that and naively preached the stimulus gospel which spoke volumes about the 'liberal' bubble that he inhabited...

  • anon||

    John Maynard Keynes?

  • Chupacabra||

    Mitt Romney?

  • Rich||

    Nice analysis, Shikha.

    One might venture that another fallacy is the notion "we" have $35 billion for stimulus spending.

  • anon||

    I don't know about you, but for $35 billion I'd be willing to do a *lot* of stimulating.

  • Rich||

    What would you do for a Klondike Bar? ;-)

  • Bill||

    You don't want to know!

  • Drake||

    We'll just print a batch of Bernakebucks.

  • T o n y||

    I can just see Shikha standing on the edge of her lawn, her house in flames, scolding the firefighters for doing pointless "busy work." But I envision all libertarians as narcissistic scolds (probably because I've watched too many Ayn Rand interviews).

    Why does it never occur to you guys that government jobs, such as teachers, firefighters, cops, and soldiers, are such because they are actually the most important jobs? Certainly more valuable to society than being a charity subsidized libertarian pablum generator.

    If all the state and local government jobs that have been eliminated because of the recession were reinstated, we'd be a long way toward full recovery. Just because you hate government doesn't change math.

  • anon||

    Really?

    You wouldn't say farming is by far the most important job in society?

    Yet you support the government paying farmers to not grow food?

  • T o n y||

    I do?

  • Mr. FIFY||

    Well, shit, Tony... let's just ALL be government employees, then. Would THAT make you happy?

  • Mr. FIFY||

    Actually, asking that was kind of redundant, but it would still be fun to watch you try to not say "yes, yes we should".

  • T o n y||

    Nope.

  • Mr. FIFY||

    Then you're a pretty sad-assed example of a Democrat. You should be kicked out of their club.

  • T o n y||

    The entire world is not as simpleminded as you.

  • Mr. FIFY||

    Thanks for calling me stupid, Tony.

    It's because you attended college, and I didn't... right?

    Wait, don't bother. I already know what you're gonna say.

  • anon||

    You see FIFY, Tony just believes you have to have the *right* amount of government workers. Which is more than current but less than all. And only TONY know's exactly how many government workers are needed; well, Tony and Obama. The answer is MORE!

  • T o n y||

    It depends, of course, on what ends you have in mind. Do you want sufficient economic growth to generate full employment in a period of depressed private-sector demand? Or is your goal for us all to suffer needlessly like ascetic monks under a strict moral order?

  • anon||

    Do you want sufficient economic growth to generate full employment in a period of depressed private-sector demand? Or is your goal for us all to suffer needlessly like ascetic monks under a strict moral order?

    I want neither, because I don't live under the assumption that I can plan an entire economy to satisfy the demands of (quite literally) 6 billion different people with different desires.

  • T o n y||

    But their desires aren't different. Desire for food, water, shelter, and relative comfort are pretty universal.

  • anon||

    But their desires aren't different. Desire for food, water, shelter, and relative comfort are pretty universal.

    So you'd be happy living in a mud hut in Africa then?

    Our desires are apparently quite different. If that's just between the two of us, imagine that times 3 billion to the 6th power.

  • anon||

    actually, I think it'd be closer to ^6billion, but in reality the differences are incalculable.

  • Rubber Nipple Salesman||

    Each person's desires are different in relation to the others as well.I'm willing to live in a crappy house in order to eat better food on my modest income.If my own individual desires aren't on par how can an astronomical factor of desires be made equal?

  • Mr. FIFY||

    So, if we don't hire more teachers, cops, and firemen... we won't have drinking water?

    /Tony logic

  • Sevo||

    T o n y|6.19.12 @ 9:57AM|#
    "Why does it never occur to you guys that government jobs, such as teachers, firefighters, cops, and soldiers, are such because they are actually the most important jobs?"

    Another day, another smoking pile of lies from shithead.

  • T o n y||

    So when your house catches fire, do you call the nearest hedge fund manager?

  • R C Dean||

    I call the fire department. Which, for my community, is not taxpayer funded.

  • Rubber Nipple Salesman||

    I have fire extinguishers and 100 feet of garden hose.I won't sit on my hands and watch my property burn.

  • AyDub||

    Oooooh...aaaaah...Aren't you a paragon of self-reliance?

    Would love to know, though — what happens if you're at work when your house catches fire?

    Oh, I get it — you can play fireman all day because you don't actually have a job to go to. In that case, you probably have quite a bit of spare time on your hands. So maybe you could spend some of it trying to find an example of a nation that has actually prospered by implementing this libertarian horse excrement you hold so dear.

    That should keep you busy for a while, dipshite.

  • SolidCitizen||

    There is this amazing financial service that you can purchase called "Fire Insurance". Many people purchase this amazing product so they can have peace of mind and financial security while they are away from their homes working. They don't have to stay home all day to guard their house.

  • Drake||

    I call my town's volunteer fire department.

  • AyDub||

    Thanks, Tony, for trying to hammer some sense into these knuckleheads. Although I suspects your efforts will be to no avail.

    Why is it that these chimps can't seem to grasp that Keynesian economics have been PROVEN to work? That the American WWII effort — public spending of the highest order — pulled us out of the Depression? And that
    they have absolutely no evidence for their beloved austerity EVER having resulted in prosperity?

  • Joseph_of_Steel||

    So, the national and global economic climate where the same then and now?

    And, the reasons at the roots of the depressions were the same then and now?

    You have just presented the very crux of progressivism:

    Correlation equals causation.

    If the causes of the depressions aren't the same, then chances are the prescription for recovery is not the same.

    If the Great Depression was due to a lack of capital....and this depression is due to other causes.....chances are that treating it as a lack of capital (and redistributing income...which is what creating unnecessary public jobs is) will NOT work.

  • Joseph_of_Steel||

    And, BTW...read up on Keynesian economics.

    Obama is only implementing the SPENDING part of Keynes' prescription.

    There is entire other part of Keynesian economics that Obama is NOT deploying.

    I'm sure you know what I am talking about.

  • Rubber Nipple Salesman||

    My job is the most important one.I use it to provide for myself and family.If I have nothing,what do I need T's,C's and F's for?

  • T o n y||

    But where would you be if you were born in a country full of unchecked crime, fire, and ignorance?

  • Rubber Nipple Salesman||

    Detroit?

  • Mr. FIFY||

    If we hire enough firemen, houses will cease to catch fire.

  • Rubber Nipple Salesman||

    Seriously,though,this is a large vs small govt. argument.You've thrown into the mix,conditions that exist in third-world-shitholes,something not mentioned here at all.

  • Rubber Nipple Salesman||

    @11:27-Directed at T o n y

  • anon||

    California?

  • Red Rocks Rockin||

    But where would you be if you were born in a country full of unchecked crime, fire, and ignorance?

    Liberal urban shitholes?

  • Rubber Nipple Salesman||

    Like Detriot?

  • Joseph_of_Steel||

    Where did anyone say we don't need teachers, firemen or policemen????

    The only point I have seen is that we don't need MORE!

  • CampingInYourPark||

    "If all the state and local government jobs that have been eliminated because of the recession were reinstated...."

    I hereby reinstate all government jobs paid for with carbon credits.

  • The Craig||

    I want to know where Tony lives, since apparently he is surrounded by fires from a lack of firefighters.

  • Mr. FIFY||

    What sucks is, Tony's home seems to not be catching fire.

    Damn the luck.

  • anon||

    Oh the irony if his house burnt down and he received a check from a private insurance company.

  • Mr. FIFY||

    I would volunteer to pee on the embers.

  • Bill Dalasio||

    Except, where is all the evidence that America's fire departments are somehow or another critically undermanned? Hell, much of the country relies people willing to do the work on a volunteer basis.
    Cops? Seriously? Are you really going to try to convince us that, when we have police departments buying paramilitary equipment, we are woefully short on funding for law enforecement?
    Finally, your claim about government employment is simply pure bunk. Total non-farm payroll emplyment peaked at 138.023 million in January 2008. It has fallen to 133.039 million, a loss of 5.014 million jobs. In the same period, the private sector lost 4.607 million jobs and the government lost .407 million jobs.
    Just because you love government doesn't change math: .407 =/= 5.014.

  • T o n y||

    As long as you're not figuring in public sector layoffs when you're bitching about the unemployment level. Public sector jobs were more shielded for a time due to stimulus money, but that's where the losses have been since then. And when you're talking about aggregate effects of unemployment from a demand-side perspective, a laid off teacher represents exactly the same blow to the economy as a laid-off private sector employee making the same income.

  • Bill Dalasio||

    Tony, what part of this do you not understand. Public sector layoffs accounted for all of 8% of the job losses since peak. It's a trivial part of the job loss. Hiring back all the laid off public sector workers won't do jack-all to restore employment levels to anywhere near peak. This is the actual math of the situation and palming off the glib line of BS that Ezra Klein cribbed from Henry Blodget's (there's a real fount of informational integrity) team at Business Insider isn't going to change that.

  • Rubber Nipple Salesman||

    So the Stimulus artificially postponed a much-needed correction in public sector over-employment? Is that what "shielded" means here?

  • T o n y||

    A vicious cycle of decreased demand and employment is not a "correction."

  • Rubber Nipple Salesman||

    If it took stimulus to prop it up,it wasn't demand in the first place.

  • mgd||

    A vicious cycle of decreased demand and employment
    We're supposed to rehire to previous levels even in the face of decreased demand?

  • ||

    Because demand and employment are always constant. Because the economy is static. Just like the climate.

  • ||

    Because demand and employment do not change. Because the economy is static. Just the climate.

    Considering that "Progressives" are ostensibly so obsessed with reform and change, it's ironic that they expend so much time and energy trying to ensure that things like the economy, the climate, the availability of natural resources, and even population levels remain exactly the same eternally.

  • ||

    Fucking squirrels...

  • Enjoy Every Sandwich||

    Except, where is all the evidence that America's fire departments are somehow or another critically undermanned? Hell, much of the country relies people willing to do the work on a volunteer basis.
    Cops? Seriously? Are you really going to try to convince us that, when we have police departments buying paramilitary equipment, we are woefully short on funding for law enforecement?

    Tony, I'd like to see your answer to this question. Whether or not one values a teacher or a firefighter is not the issue. The issue is are we suffering from a shortage of such? Based on what criteria?

    Saying that "X percent of teachers have been laid off" doesn't answer the question. If a given district has more teachers than it needs then laying off the least effective ones is good because it frees up resources for other things more important than providing a sinecure to a union member--like, say, teaching a kid to read.

  • T o n y||

    I think in terms of recovering from a financial crisis, whether we have an efficient number of teachers and firefighters is just not that important a question for the short-term. Say we're saturated in those professions. Fine, hire people to fix bridges. The problem is weak demand due to high unemployment, problems that compound each other and which bleed into all sectors.

  • Enjoy Every Sandwich||

    You do know, I hope, that not just anybody can fix a bridge. So we're still in the same place: which bridges get fixed and how many people do you need to do it?

    This is where your precious big government fails. It does not decide such things based on economics or science or even common sense. It decides them based on politics and the wishes of politicians to get re-elected.

  • T o n y||

    We are perfectly capable of assessing which bridges need repair, and we have done so.

    If we left that question up to the market, and not government experts, we'd have to wait until the bridges fall down, in order to send a market signal, right? People don't know if a bridge is at risk just by driving on it.

  • Rubber Nipple Salesman||

    That's a pretty poor judgment of your fellow man.It's astounding to me your assertion that a reasonable person can't draw a conclusion based on common sense.

  • The Knuckle||

    Tony,

    Why do you believe that as soon as someone works for government they suddenly only care about you and your well being with no other considerations? Do they acquire wings and halos, or are they just people like the rest of us?

  • sarcasmic||



    Open at random any book on philosophy, politics, or history, and you will probably see how deeply rooted in our country is this idea — the child of classical studies, the mother of socialism. In all of them, you will probably find this idea that mankind is merely inert matter, receiving life, organization, morality, and prosperity from the power of the state. And even worse, it will be stated that mankind tends toward degeneration, and is stopped from this downward course only by the mysterious hand of the legislator. Conventional classical thought everywhere says that behind passive society there is a concealed power called law or legislator (or called by some other terminology that designates some unnamed person or persons of undisputed influence and authority) which moves, controls, benefits, and improves mankind.
    http://bastiat.org/en/the_law.html
  • sarcasmic||

    "That's a pretty poor judgment of your fellow man."

    The Socialists Despise Mankind

    According to these writers, it is indeed fortunate that Heaven has bestowed upon certain men — governors and legislators — the exact opposite inclinations, not only for their own sake but also for the sake of the rest of the world! While mankind tends toward evil, the legislators yearn for good; while mankind advances toward darkness, the legislators aspire for enlightenment; while mankind is drawn toward vice, the legislators are attracted toward virtue. Since they have decided that this is the true state of affairs, they then demand the use of force in order to substitute their own inclinations for those of the human race.
  • The Hammer||

    But if someone owned the bridge, he or she would have incentive to maintain it so that it doesn't fall down. Government, on the other hand, has some incentive to let the occasional bridge collapse so that useful idiots like you will scream for them to take more of other peoples' money to protect you from all the bridges collapsing.

  • Red Rocks Rockin||

    We are perfectly capable of assessing which bridges need repair, and we have done so.

    Assessing which ones need repair and hiring people capable of repairing them isn't the same thing, dumbass.

  • Bill Dalasio||

    Then can you please, for the love of God, lay of the self-righteous, presumptuous crap about a fire at Dalmia's house. By your own admission its a bullshit narrative to justify making payments that you'd make in any case.

  • Mr. FIFY||

    "and not government experts"

    Fuck, Tony... why have a private sector at all?

  • Red Rocks Rockin||

    And when you're talking about aggregate effects of unemployment from a demand-side perspective, a laid off teacher represents exactly the same blow to the economy as a laid-off private sector employee making the same income.

    Without the latter, the former doesn't have a job to begin with. That's the key piece of the puzzle you are neglecting.

    The labor participation rates aren't at 30-year-lows because a bunch of third-tier-trash clerks got laid off the last two years--it's because the private sector hasn't even come close to recovering even the levels of the 2001-2003 recession.

    And until THAT happens, the public sector will continue to bleed workers, because unlike the Feds, states and municipalities are aren't allowed to spend more than they take in. That's what's known as "sound fiscal policy" and it's something you have very little familiarity with.

  • Joseph_of_Steel||

    "a laid off teacher represents exactly the same blow to the economy as a laid-off private sector employee making the same income."

    WRONG.

    The teacher's job is a non-value add. It does NOT generate revenue....it costs revenue. Teachers' salaries are paid by taking money from other peoples' pay....taxes.

    That tax revenue that was taken from others to pay for the teacher is still being taken and used somewhere else in the economy.

    If I work in the private sector...I am being paid because my job adds value (generates at least as much revenue as I am paid)....if I lose my job...it means the company I work for has lost revenue and no longer can afford to pay me......that money is no longer being spent in the economy.

    See the difference?????

  • PapayaSF||

    Ah, Tony, using a straw man argument while talking about things burning.... Libertarians believe the jobs done by teachers and firefighters and such are jobs that need doing, but that does not mean that more of them gets those jobs done better, or that what their unions demand are necessarily good ideas, or that the federal government should be paying for any of it. Clear now?

  • Brutus||

    Ever notice that statist cocksuckers like Tony never threaten us with laying off some useless bureaucrats at the Dept. of Education, Commerce, HHS, Energy, etc? Nope, the first thing they pull is the cops and firemen.

    Fascist jackoff.

  • PapayaSF||

    But what would we do without our USDA rabbit inspectors, making sure the poor bunnies aren't mistreated by stage magicians, as happened so tragically in our shameful past?

  • Atillahn||

    Oh dear, you do not understand. It's all about "innovation."

    The government will pay people for a year or two and America's world class innovators will innovate new innovations to start whole new industries and employ everybody AND pay back the debt.

    The innovators are innovating right now, as we speak in places like Silicon Valley. There are 5 new Facebook's just springing up now and they will be great public companies in, at most 9 months.

    Now do you understand?

  • anon||

    The government will pay people for a year or two and America's world class innovators will innovate new innovations to start whole new industries and employ everybody AND pay back the debt.

    This is actually more true throughout the past 250 years than you'd like to believe. I don't think it can survive the kind of burden our current government (TEAM RED and BLUE alike) would like to see though.

  • The Hammer||

    I really can't tell if this is sarcasm or if Krugman finally figured out how to register.

  • Mr. FIFY||

    What liberals seem to either forget, or want us to believe, is that teachers and firemen and cops are not FEDERAL employees.

    This is about Barry and his desire to get more of the latter on the dole/payroll. Which is what people like him do all day.

  • DarrenM||

    What liberals seem to either forget, or want us to believe, is that teachers and firemen and cops are not FEDERAL employees.

    To be fair, many commenters speak of "government" employees without specifying federal, state, or local. I believe most mean *federal* employees, though I also expect some do mean any level of government. People should be more clear. Remember. People who don't know any better are reading.

  • nickfff||

    A lot of the original stimulus money went on state aid, i.e. giving money to the states to make up for the drop in revenue due to the great recession. States generally have tighter fiscal rules than the federal government so are unable to absorb that "shock" to the system. Much of the federal aid was then used to prevent having to sack TFCs. So although it's a valid point to say that the TFCs are not federal employees, they have been relying, indirectly, on federal spending. Now that the original stimulus spending has pretty much run out, state budgets are becoming tighter again. More stimulus might prevent states from having to lay off TFCs, or possibly reduce the number.

  • DantoRang||

    I would have to say its about time to hit it on up dude.

    www.Anon-Browser.tk

  • Red Rocks Rockin||

    Here's the bottom line on the argument that we need to hire more government workers or the economy won't recover--it's all based on a fallacious, nostalgic desire for some New Deal-type program like the CCC or WPA to be reinstituted. The implication is that there's a whole untapped sector of blue-collar and menial laborers out there who just want to be able to bring home a paycheck, regardless of what it is they are doing.

    Of course, what these nostalgists don't mention is that 1) these workers got paid about $6000 a year, inflation-adjusted, and 2) managerial socialists have spent the last 40 years trying to get everyone a college degree, rather than acknowledge that most people simply shouldn't attend college due to lack of ability. As a result, this working-class sensibility they are appealing to became a phantom a long time ago. It simply doesn't exist anymore, because phaggot college students get a degree and think they are entitled to get paid $80K a year to work the job of their dreams.

  • nickfff||

    BLS sez:

    Unemployment rate in the construction sector is running at about 15%. Therefore there are several million unemployed construction workers who, I'd imagine, would quite like a job, maybe building roads, thank you very much.

    Source: http://www.bls.gov/iag/tgs/iag23.htm

  • Red Rocks Rockin||

    At $6000 a year? Good luck with that, dipshit.

  • C. S. P. Schofield||

    If the main products of the regulatory state were red tape and mandates it might not be so bad. Unhappily, the actual need for safety regulation was passed some time back, and to keep expanding their empires the regulatory statists have made their primary products junk science and blovation.

  • DantoRang||

    Sounds like a plan to me dude. Wow.

    www.Anon-Browser.tk

  • Andrew_M_Garland||

    Government promotes itself as a scientific manager. It sets goals with numeric precision and finds direct ways to meet these goals.

    Team Obama economists come into Obama's office each week and discuss how to get the economy going. They discuss the official statistics of GDP (Gross Domestic Production) and jobs held. The government wants a statistical recovery.

    Team Obama wants to report hard numbers, however they are accomplished. If you argue with numbers, you are a moron. Who are you to question the non-partisan measurements of a government bureaucracy with huge datasets and giant computers? You are a peasant.

    The economists point out a direct plan. When government hires more workers, their pay and benefits are counted as increasing GDP no matter what they do or accomplish. Obviously, they now have a job, so the employment statistics improve immediately. This is a no brainer! It is a two'fer.

    Expanding government employment directly and immediately improves the two statistics which government cares about. It is the direct path to statistical prosperity.

    Plus, Team Obama believes in the Keynesian Multiplier. They actually believe that they will produce more wealth for us all, if they can pay out more cash to accomplish anything or nothing. So, it is a three'fer.

  • Andrew_M_Garland||

    ** If the Multiplier were true, then we could Counterfeit Our Way to Wealth. But sorry, it isn't true.

    Here are the facts about government master plans, oversight, and statistics.

    ** Unintended Consequences and Perverse Incentives

    === ===
    [edited] Managers and employees of glass plants in the former Soviet Union followed master-plan production guidelines.

    At one time, they were rewarded according to the tons of sheet glass produced. Not surprisingly, most plants produced sheet glass so thick that one could hardly see through it. (And, this glass did not fix prior applications such as broken windows.)

    The rules were changed to reward the total area (square meters) of glass produced. Then, they produced glass so thin that it broke easily.
    === ===

    Team Obama wants to manufacture more statistical GDP and jobs numbers in any way it can. Thick or thin doesn't matter.

  • ||

    hey found that this money produced not private-sector growth but retrenchment. Indeed, in every state, virtually every affected firm—large http://www.maillotfr.com/maill.....-3_21.html and small—cut payroll, investment, and other expenses. Why? As publicly funded enterprises grew, they crowded out demand and resources from private ones.

  • HeftyJo||

    Keynes is no doubt spinning in his grave right now at his name being used to support ever increasing levels of government spending. Keynes approach to stimulus style spending was directly aimed at fixing the problems that were ailing the country during the Great Depression. It was not a blank check to be used by the government as an excuse to spend and run deficits as far as the eye can see. The problems during the depression were a huge devaluation of currency as nearly 1/3 of the cash within the economy was destroyed. The lessons learned by the politicians is that any time there is a problem with the economy the answer is always, "fire up the presses and print more money!" But what Keynes discovered was that if you need stimulus spending by the government then it should specifically target autonomous spending. The problem with Obamanomics is that all the government spending is being done at the federal level and the money is just not getting to the local and state governments were it is closer to the tax-payers from which the money was originally obtained. Instead the money is being spent as it suites the interest of the D.C. politicians and associated D.C. crowd of crony capitalists. And what money does make it's way to the states was immediately put into paying down their deficits and balancing their budgets. Very little of the money actually ended up being put were it really needed to be in order to have any perceivable effect on improving the economy.

  • muirgeo||

    Sounds good except that history completely refutes your claims. You are pushing Hooverism and that failed miserably. Now, the only time we did not increase public sector jobs after a recession since Hoover is during this recovery and it is indeed a weak recovery. But you can not point to one post Depression recovery that wasn't followed by increases in government employment. And blaming lack of investment on possible changes to the lowest tax rates ever and the Health Affordability Act is unsupported by evidence. All surveys show lack of sales as the number one cause of holding back on investments.

    Also the idea that every private sector job exist because it creates more wealth is bunk... AIG and its CDS??? Really they created more jobs? No in fact they stole huge amounts of wealth from the productive economy bankrupting western civilization. Regarding the public sector and wealth creation I just returned from the booming town of Branson Missouri... the boom starting AFTER the government built Table Rock Dam and Power House. These facts overwhelm your hear-say. And then there is the whole post FDR 50 years of shared prosperity preceded by the laissez faire collapse of the 20's and now followed by the post Reagan/Thatcher/Friedman neoliberalism economic paradigm collapsed economy thanks to finance market innovation held out of government oversight.

  • josh||

    i know this has to have been mentioned before, but i just can't wrap my brain around why they didn't create many more jobs by spending less than -what was it?- $200K per job. heck, the average household income in america is what, $46K? i know they think $200K should be the starting salary, but i would've thought jobs would be the priority. just can't wrap my brain around it.

  • ∞ ≠ ø||

    Following this thread has lead me to make the following comment.

    The people who fix the bridges are all unionized. The problem (for this digression) starts there.

    I see no quotable Romney solutions in the comments.

    Let's take a look in the rear view mirror to see what we left behind because we were duped by a false narrative from the subversive press.

    http://money.cnn.com/video/new......cnnmoney/

    Romney already isn't cutting it.

  • ∞ ≠ ø||

  • nickfff||

    Nice post, with some arguments that I'm not familiar with. A few points (in no particular order):

    Point three: That's a really good point, but I think that it's an argument for smart spending of stimulus funds rather than against a stimulus itself. If money could be spent, for example, fixing roads, on ultra-fast broadband and other infrastructure projects would that make it worth doing? If so, then the priority should surely be engagement rather than opposition to the stimulus per se.

    Point 1: I think that you're trying to argue against using borrowed money to stimulate AD but it kind of wanders off to complain about public sector inefficiency (which is an important issue but beside the point in this case). On the point about paying people to sit around, Keynes said the government should pay people to bury money, then allow people to dig up the money and spend it. The second part of that quote (which people seem to forget) is that he also said that it would be better to get people to build houses (or presumably, bridges, roads, airports, high speed train lines, etc.) but that it was difficult to persuade politicians to do that.

    Point 2: Another good point and I can well believe that public sector spending can crowd out private sector, but I suspect that it doesn't hold true at the moment. There is currently massive underemployment of resources (labour, etc.) and so the private sector will not be competing with the public sector for resources in the same way.

  • political_proxy||

    Marxism requires the elimination of the middle class. The means being used by Ø as outlines here display the results of a growing gov and what happens to the middle class - they vanish.

    This is all by intent. The usurper does not need be smart to follow some basic ideas of the Marxist playbook - an average high schooler could do this effeciently.

  • vicky||

    Good article.

    I think Obama "knows" how to grow our economy, its just that its not his plan to do so. His plan, because he hates America is see her grovel.. third world here we come if he gets 4 more years.

    this is the plan.

  • Bernd||

    All of this boils down to a couple of simple propositions:

    1) Governments cannot borrow and spend their citizens to prosperity. If this were true then Greece, Spain and Italy would be shining examples of prosperity.

    2) Government spending is bad. It's net effect on the economy is bad. Milton Friedman was right and (in the general case) Keynes was wrong.

    3)The cost of a government is best judged by what it spends, since government spending is always harmful. Sometimes there is a return on that spending (when it is truly investment), but all government spending has a cost associated with it.

    4) Most government spending is not investment. 99% of the Obama stimulus package was not investment.

    5) Macroeconomics as taught in our colleges an universities and as preached by Keynesian idiots like Paul Krugman is wrong. It is wrong because it assumes that a borrowed $1T that is spent by the government increases GDP when it fact you have to subtract the cost of getting the money and paying interest on it forever.

    6) So borrowing and spending $1T hurts the economy twice. One $1T hit in due to the cost of extracting the money, and one $1T hit due to the PV of the interest payments on the loan. So borrowing $1T in fact costs $2T.

  • Leftcoastrocky||

    1. Rehiring teachers will make class sizes smaller and school years longer -- both benefit the economy and the nation.
    2. Fixing and updating our infrastructure benefit our economy and our nation.
    3. Hiring more specialists at the FDA and the Patent Office will help our economy and our nation.
    4. Dalmia's sarcasm, which she probably thinks is real clever, does not help her position and certainly does not help our economy or our nation.

  • tatanka||

    Four. Nothing the administration proposes will offset the regulatory burdens created over the last twenty years on the income statement. Burdens on the income statement must be offset in some way to keep businesses profitable before taxes. The regulatory environment has also caused greater risk for business and therefor business must now demand higher returns as a consequence. This means that business must lower the total cost of labor. The economy won't recover until government discovers that there are such things as financial statements and that they dictate the future.

  • Leftcoastrocky||

    Shikha, you must make your living being obnoxious and offensive like Ann Coulter.

  • theakeman||

    It's just been gimmicks up to now: http://modeltstocktrends.blogs.....onomy.html

  • willdit||

    This is a great article! It puts the problem with stimulus to the public sector in plain english. Thanks!

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