Stimulus

No, It's Not Time For Another Round Of Stimulus

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Last month, the U.S. created just 54,000 jobs—well below the roughly 150,000 necessary simply to keep up with population growth—and unemployment crept upward to 9.1 percent. Those ugly jobs numbers have already provoked cries for action from Washington from a number of liberal bloggers.

We've heard this line before. In early 2009, as the economy reeled, the Obama administration passed a stimulus with an enormous price tag that's since grown to roughly $800 billion. The stimulus package came attached to very specific promises about the unemployment trajectory that would follow its passage, and those promises were crucial to the administration's case for passing the spending. 

Well, we passed the stimulus. But as the chart below shows, the promised jobs didn't materialize. With the stimulus in place, we were supposed to see less than seven percent unemployment by now. Via Cato's Dan Mitchell, here's an updated comparison between the unemployment numbers the Obama administration predicted (the blue line) under the stimulus and the dismal unemployment figures we've actually seen (the dots):

See how the dots don't match up with the line?

Meanwhile, the jobs-created-or-saved numbers the White House constantly touts in order to justify the stimulus are essentially useless. They're based on slightly updated versions of the same models that initially predicted the stimulus would create jobs rather than real-world measurements. As the director of the Congressional Budget Office, which produces the estimates, has made crystal clear, the topline numbers in the stimulus reports are disconnected enough from reality that if no jobs had been created at all, the official estimates would not reflect that fact.

So the official estimates tell us nothing of value. And the unemployment numbers in our post-stimulus world don't even come close to matching the administration's rosy original predictions. What's the case for adding more expensive, debt-driving stimulus to the pile when there's so little evidence that the last round worked in the way we were all promised it would?  

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  1. Mitchell’s chart is a bit skewed. The original Bernstein and Romer chart plots a 3 month moving average unemployment rate (blue line). The red dots added in here are monthly data, which are inherently more volatile so it’s no surprise that they spike higher. It’s not a huge difference. Still, it would be more honest to make an apples to apples comparison.

    1. Wow…I’m going to take full credit for this new Jim’s comment. It’s more content-focused and less snarky than mine usually are, so hopefully this guy makes me look smarter.

      Thanks, NewJim!

      1. Crap! Now I can’t tell which is the real Jim, and which is his mirror universe counterpart! Damn it, Jim!

        1. If the new guy keeps it up, I’ll style myself “Jim Classic”.

          1. How about the other one just goes with “Jim with a goatee?”

            1. It’d never work, because I actually have a goatee. But you’re thinking – I like that.

              1. Then we could go with “fat Jim” and…well, you can see where I’m going.

    2. That is kinda like arguing that the target is a smooth circle while the bullet holes are scattered around and ignoring the fact that none of the bullet holes are in the target.

      1. +1

  2. Does a writer who writes about the stimulus count as a job saved under the stimulus?

    1. 3 jobs – it’s the multiplier effect!

  3. Well, can we have another “Quantitative Easing”? I’m sure a little hyper-inflation will increase the demand for wheelbarrows.

    1. This. The falling price of silver is killing me right now.

      1. You mean you didn’t short it when Carlos Slim started selling Silver futures?

        I’m not a huge fan of momentum investing but when a guy who knows the business as well as he does indicates the current market price is on the high side it’s a good idea to at least hedge out your long position.

  4. The stimulus worked fine, but it didn’t go far enough. Now is not the time to backtrack. I’ve just pissed in my pants, and nobody can do anything about it.

    1. We’ll always have Japan.

    2. The problem is, you can’t argue against this line of argument. Nobody knows what the unemployment rate would have been without the stimulus, or what it would have been if the stimulus was larger. Logically, the larger the stimulus would be, the lower the unemployment rate would be (and higher the deficit would be, of course). If the government hired the equivalent of 1% of the population of people able and willing to work due to a large stimulus, the unemployment rate would, by definition, drop by 1%.

      That is, the stimulus works at lowering unployment by definition, because it was used (in part-there were tax cuts in there too) to hire people who else would not have jobs.

      Had the stimulus had not been in existance, unemployment would have gone up be even more.

      Just because the predictions were wrong didn’t mean it didn’t work. The predicitions were predicting the rest of the economy would have done better than it actually did.

      1. Why would the stimulus, considering where the money went, actually result in millions of new jobs?

        1. Looking back on the bleak Obama times, I’m sure at least one historian will point out one terrible irony: Bush, the alleged super-crony President, gave all American tax-filers $300 across the board. Obama, the alleged progressive, gave trillions to well connected elites.

          1. Just highlights again the lie that the Democrats are “for” the little people. They just use them. Period.

        2. Well, a lot of it went to tax decreases and increased unemployment benefits, neither of which directly result in new jobs, although both put more money in people’s pockets so they had more money to spend, so they bought more stuff, so those indirectly created more jobs-and private sector ones too.

          But I’m talking about straight out Federal hiring (public infrastructure works, paying the states to hire and/or not lay off people, etc.). If the government hires somebody without a job, unemployment goes down by one person.

          Now, you could argue that there are possible long term problems with increased government debt. But not fixing a short term problem due to potential long term problems is a bad idea.

          The time to fix that is after the economy has recovered. I would be in favor of deficit reduction methods (tax increases and government spending decreases) after unemployment has dropped to a managable level.

          1. ” But not fixing a short term problem due to potential long term problems is a bad idea.”

            This is why we are in the situation we are in. And this is stupid.

          2. It should be easy to get unemployment down to “a manageable level” though… according to the way you’ve outlined it, each person without a job that the government hires reduces unemployment by one person. If it’s really that simple, you can just figure out how many people you need to make government jobs for to get unemployment to a manageable level, and hire those people. Simple as that. Or maybe there’s something wrong with that way of looking at it in the first place.

      2. “If the government hired the equivalent of 1% of the population of people able and willing to work due to a large stimulus, the unemployment rate would, by definition, drop by 1%.”

        That is what is seen. What about what is unseen?
        The money the government uses comes from somewhere. It is taken away from people who may have spent it on something that creates jobs, or it is borrowed from someone who may have lent it to someone who creates jobs.

        Then there is the crowding out factor. When politically favored businesses do work that other private sector workers could have done, what happens to those jobs?

        The money extracted from the economy to put 1% of the population to work, when you factor in the unseen effects, could very well have put 1% or more out of work.

        1. In the long term, you might be correct (or maybe not).

          But unemployment sucks in the short term.

          It’s not like there’s not real world proof that government spending can get the country out of a recession-look at World War II. The unemployment rate went from 14.6% in 1940 to 1.2% in 1944. That was due to governmental hiring due to World War II-a stimulus, if you will.

          1. Yeah. Military conscription tends to do wonders for unemployment statistics.

          2. Unemployment rate of slaves is zero. What’s you’re point?

      3. If the government hired the equivalent of 1% of the population of people able and willing to work due to a large stimulus, the unemployment rate would, by definition, drop by 1%.

        Slightly OT, but I don’t know that I would call such a plan a “stimulus”. The point of a “stimulus” is not to create the jobs per se, but rather rev up the economy so that it can create jobs. A program that doesn’t do that is just a make-work jobs program.

        (Not that I believe that the government can truly stimulate the economy; I’m just sayin’ if they’re gonna use the word they gotta be marginally consistent with the definition of the word.)

      4. “That is, the stimulus works at lowering unployment by definition, because it was used (in part-there were tax cuts in there too) to hire people who else would not have jobs.”

        Wrong.

        Government has nothing to spend except that which it has first taken away from someone else.

        Government spending is nothing more that forced transfer payments.

        The detriment to the transferors cancels out any benefit to the transferees.

      5. Logically the money given to the government in bonds sales would have gone to some other investment. And not all investment is created equally. In other words the money would have been spent regardless and would have been spent more productively.

        1. Damn my slow fingers but sarcasmic and Gilbert said basically the same thing.

      6. Highering 1% of the population does not “by definition” reduce the rate of unemployment by 1%. The unemployment rate is the percentage of the workforce seeking but unable to find unemployment. Govt “stimulus” jobs are at least as likely to draw workers from the ranks of the employed as the unemployed.

        1. I said “If the government hired the equivalent of 1% of the population of people able and willing to work”, not “Highering 1% of the population”. The definition of the unemployment rate is the number of people willing and able to work – (number of people with jobs / number of people willing and able to work). So, if 100 people are willing and able to work, and 90 people have jobs, 100 – (90/100) = 10% unemployment rate. If the government hires 1% of the population (one person), then you get 100 – (91/100) = 9% unemployment rate.

          1. Not if the new govt employee leaves his private sector job for the govt job. That’s the point others have been making. Gov’t spending diverts resources from the private sector.

          2. In fact, what if the new govt worker previously owned a construction company that was failing due to the economy. When he leaves, he stops paying rent to his landlord who now needs to look for a job. He fires his recptionist, and two construction workers. Did govt just create unemployment?

            1. Geotpf, your silence is a concession that your Keynsian bullshit does not withstand scrutiny. There is no correlation between stimulus money employment that reason can detect.

      7. Of course you can argue against it. You can say it’s an unfalsifiable claim that they’re making up after the fact to cover their asses.

      8. Just because the predictions were wrong didn’t mean it didn’t work.

        Just because nobody has seen Santa Claus doesn’t mean he doesn’t exist.

        The predicitions were predicting the rest of the economy would have done better than it actually did.

        If their econometric models cannot predict the performance of the ‘rest of the economy’ [WTF does that mean, BTW? Is there a Martian economy that somehow is supposed to produce jobs for the US without being affected by the stimulus?], why should we trust any economic program they promote?

        1. Oh, but I certainly saw you! And you should stop doing that…it will make you go blind!

  5. The Phillips Curve must be true. It must.

    1. People take that seriously? I was high when I drew that thing!

  6. Just think of how much worse it would’ve been without the stimulus!

    1. Exactly! Would you like to appear in my place on tonight’s ED Show?

  7. “Well, we passed the stimulus. But as the chart below shows, the promised jobs didn’t materialize”

    Not a big surprise, since there has never been any other instance on earth where any Keynsesean government spending “stimulus” program has ever worked either.

  8. Here’s my favorite depressing statistic in terms of the hole the unemployment numbers are in right now-

    US Has To Create 250K Jobs A Month For 66 Months To Return To December 2007 Unemployment By End Of Obama’s Second Term.

    http://www.zerohedge.com/artic…..as-second-

    Yep, good luck with that while Obambi and the Bidenator are running the show.

    1. You’re getting sleepy…sleepy…

  9. B…BUT…BUT…IT WASN’T ENOUGH!!! ZOMG!!1!1! Krugman said we need to spend MORE…World War II level more! We need to order gazillions of tanks and airplanes and ships whether we need them or not! He has a fucking NOBEL PRIZE!!! They don’t just hand those things out to anybody, for essentially doing nothing, you know!!!

    1. Nice try, Virtual Tony. Be a nice boy and hand me my bottle of Nobel Prize Tarnish Remover.

  10. Please, God, stop.

  11. Why so gloomy? Let’s all remember the words of Shakespeare: If at first you don’t succeed, try, try, again.

    1. My favorite Shakespeare quote: Knaves before wenches.

      1. Many a good hanging prevents a bad marriage – Twelfth Night, Act 1, Scene 5, l. 19.

  12. I really would have thought that making billions of dollars unavailable to businesses who hire people, and instead using it to prop up the politically connected, would have a positive effect on the economy.

    You really mean to say that taking resources from the productive and giving them to the connected doesn’t generate wealth and create jobs?

    Everything they taught me in government schools is wrong!

  13. No worries, the rich can pay for all this, they just need to pay their fair share, or so I’ve been told by every liberal I’ve ever encountered. Not a very reflective bunch, are they?

    1. The rich don’t pay their fair share.
      We know this because they are rich.
      If they paid their fair share they wouldn’t be rich.

  14. You know, I try to get my liberal neighbor to understand how the productive sector works (so to speak), and that the government shoveling money around won’t fix things, and she just doesn’t get it.

    Of course, she also told me once that Chuck Shumer really understands how ordinary people live their lives, so it may be hopeless.

    1. Mainer, you bigot. 90% of the American population is Jewish, as evidenced by our support of Israel. Of those, 50% ride in limousine’s at least once a week. It’s called the census, dumbass. Read it sometime.

  15. Stimulation

    Yahoo! This is your stimulation.
    Yahoo! This is your stimulation.

    Stimulate good times, come on! (Let’s stimulate.)
    Stimulate good times, come on! (Let’s stimulate.)

    There’s a party goin’ on right here,
    A stimulation to last throughout the years.
    So bring your voters’ dimes, and your laughter, too.
    We gonna stimulate your party with you.

    Come on now.

    Stimulation.
    Let’s all stimulate and have a good time.
    Stimulation.
    We gonna stimulate and have a good time.

    It’s time to spend together.
    It’s up to you, what’s your pleasure?

    Everyone on Capitol Hill,
    Come on!

    Yahoo! It’s a stimulation.
    Yahoo!

    Stimulate good times, come on!
    It’s a stimulation.
    Stimulate good times, come on!
    Let’s stimulate.

    We’re gonna have a good time tonight.
    Let’s stimulate, it’s all right.
    We’re gonna have a good time tonight,
    Let’s stimulate, it’s all right.

    Baby. . .

    We’re gonna have a good time tonight, (Stim-u-la-tion)
    Let’s stimulate, it’s all right.
    We’re gonna have a good time tonight, (Stim-u-la-tion)
    Let’s stimulate, it’s all right

    Yahoo!
    Yahoo!

    Stimulate good times, come on! (Let’s stimulate.)
    Stimulate good times, come on!
    It’s a stimulation!
    Stimulate good times, come on! (Let’s stimulate.)

    Come on and stimulate, good times, tonight (Stimulate good times, come on!)
    ‘Cause everything’s gonna be all right,
    Let’s stimulate (Stimulate good times, come on!)
    (Let’s stimulate.)

  16. I picked the wrong time to graduate college.

    Also, to stop smoking.

    1. You’re kidding, right?
      With the price of smokes these days?

      1. About $12.50 in NYC.

      2. You clearly have not seen enough action movies/Airplane!

        I was going to go with, “I quit the wrong week to quit sniffing glue.”

        Actually, while in college, my friends and I made a drinking game based on the movie Independence Day, which literally has the, “I picked the wrong day to quit smoking” line in it. Whenever you can predict the next line of dialogue, drink. We got HAMMERED.

        1. Airplane never did anything for me. Never been able to sit through the whole thing, though I did see Independence Day in the theater.

  17. What’s lacking here is a counterproposal to lower unemployment. You don’t have one? What a shock. So why not tell your philosophical cohorts in government to shut up and let the only people with an idea try to accomplish something. Surely you guys don’t want the economy to suffer just for the sake of the GOP winning the 2012 election, like they do.

    1. Massive spending cuts. Deregulation. Tax reductions. Government’s legal ability to operate outside of defined limits eliminated.

      Problem fucking solved.

      1. That sounds like the solution for government not obeying your psychotic ideology, not a solution for unemployment.

        1. Why do you think the American economy has been the greatest in the world for the last, what, 120 years? And one of the greatest before that? Because of government regulation and intervention? Doesn’t explain most of it, even if you want to claim it, because the levels of that we see today weren’t around most of the period.

          Or maybe it was the unprecedented limited government and preferences for free(er) markets that existed for most of the period? The more like that we are, the better off we’re going to be. Where do you think we generate wealth from, anyway?

          1. What are you talking about ProL? The US is little more than a wilderness penal colony, already gone native.

            The real money is in the masterfully planned economies of Cuba and North Korea.

            1. China would be totally on top, too, if only they’d had the moral strength to run over that guy standing in front of the tank.

              1. Little did we know that that brave man would one day live long enough to be run over by a Chinese high-speed train, out of control and unable to stop because the supplier used cheap, Chinese crap for parts.

                You win again, evil capitalism!

                1. Really, how did the rich oppress the poor before capitalism reared its ugly head? Beats me.

                  1. “He MUST be the king! He’s not all covered in shit.”

          2. Whatever the cause of the US economy’s strength through the decades, it is not a laissez-faire economy. We only became a global economic power after the largest spending programs and increase in government scope in our history.

            1. Don’t you get tired of being wrong? We’ve been the largest economic power since the late 19th century. Arguably, we’d achieved that even earlier.

            2. And the government built the railroads! Joe Biden told me!

      2. See what you get for feeding it?

        1. I said “fucking.”

          1. I discovered last night to my disappointment that the Chrome reasonable extension isn’t working any longer, at least on my home machine.

            Whatever Tony is, it’s become little more valuable than a mosquito in your ear while you try to sleep.

            1. He’s a sockpuppet. I used to blame thoreau for all sockpuppetry here, but he’s not around enough these days.

              1. A good sockpuppet will shake things up, if done right, like Neil.

                Tony is just trite, tiresome and dull, clogging up the threads.

                1. Like reality isn’t trollish enough for us.

    2. Getting the government out of the way and allowing people to freely interact with each other and spend their money as they choose is a plan.
      Not removing resources from the economy that could be used to reduce unemployment and diverting them to serve political purposes is a plan.

      Just because it is not top-down doesn’t mean it is not a plan.

      1. Our economy is suffering from overcapacity. Even if enacting your free market laundry list were able to work in the way you claim, it’s a solution to the wrong problem.

        How do you reduce unemployment when the problem causing it is reduced aggregate demand?

        1. The way to increase aggregate demand is to cut taxes and regulations, thus allowing the private sector to keep more of its money, allowing private businesses to lower prices, hire employees, invest, etc.

          1. If supply-side economics worked as claimed, it would have done so by now. How many decades do we have to endure before it counts as some sort of evidence?

            1. If Keynesian economics worked as claimed, it would have done so by now. How many decades do we have to endure before it counts as some sort of evidence?

              1. It worked almost immediately after it was tried, every single time. So, how long do we have to wait before the massive tax cuts of the last decade create a job?

        2. How do you reduce unemployment when the problem causing it is reduced aggregate demand?

          It probably doesn’t help that your beloved inflate at will policies are having a negative impact on real personal income

        3. Animal spirits!

    3. “the only people with an idea”

      The “idea” that Obambi and the Dems tried didn’t work. In fact, it failed miserably.

      Let’s try the ideas that the GOP has offered, which Pro Libertate so eloquently described.

      1. Failed relative to what? Every economist on the left said the stimulus spending wasn’t enough to create a self-sustaining recovery. Things are playing out exactly as they predicted.

        Even though austerity policy is popular in the world, there’s absolutely no logical justification for it as a job creating measure. And tax cuts obviously don’t create jobs, if you have been paying attention to the last 10 years.

        You’d have to claim that the recession wasn’t as bad as initially thought to say the stimulus failed, since technically the recession did end. If it’s such a failure, what caused the recovery (even if it is weak)?

        1. We accept you, we accept you, one of us, one of us!!!!

        2. Those economists on the Left have spent the past three decades ripping the Austrian business cycle theory and yet many of the proponents of said theory correctly predicted the current crisis.

          So who has credibility here? Certainly not Krugman, who’s every argument is based on blatant distortion of historical facts and takes the form of “heads I win; tails you lose”, hence is complaining about how we haven’t spent enough money on stimulus.

          1. Austrians predicted one disaster in the midst of constantly predicting disasters. Austrian economics is not taken seriously in the economics field of study. To the extent that it is, it’s because it’s corporate subsidized. It’s basic problem is that it’s not empirical. Which is why I guess you guys choose to believe whatever damn nonsense you choose in support of your premises, which you will never change no matter the circumstances.

            1. Seriously man, whoever you are, you’re getting way to good at parodying Tony. I’m starting to get worried for you.

        3. there’s absolutely no logical justification for it as a job creating measure.

          Then please tell me why in 1920-1922 the government cut spending half, and the economy grew.

          Instead of “fiscal stimulus,” Harding cut the government’s budget nearly in half between 1920 and 1922. The rest of Harding’s approach was equally laissez-faire. Tax rates were slashed for all income groups. The national debt was reduced by one-third.

          The Federal Reserve’s activity, moreover, was hardly noticeable. As one economic historian puts it, “Despite the severity of the contraction, the Fed did not move to use its powers to turn the money supply around and fight the contraction.”[2] By the late summer of 1921, signs of recovery were already visible. The following year, unemployment was back down to 6.7 percent and it was only 2.4 percent by 1923.

          Or more recently, as Niall Ferguson points out, Switzerland’s experience:

          The best option is, of course, to be Switzerland, a country strangely ignored by Krugman. The Swiss have run a prudent fiscal policy throughout the economic crisis. They have had a structural surplus in each of the past five years. Their net debt is actually lower today than it was in 2005. And guess what? In 2009 their economy suffered the smallest contraction in Europe, with unemployment today below 4 percent. As for sound money, the Swiss franc is up 95 percent against the dollar since 2000.

          1. Another interesting fact is why, if military spending brought us out of the Great Depression, didn’t we slip back into one after Truman took a meat cleaver to the Department of Defense?

            1. “Fact” should read “question”.

          2. There’s a reason you have to go to the 1920s to find a story that allegedly confirms your economic policy beliefs. True that there was a recovery without direct government action, but the recession (in real terms) was nowhere near as severe as the GD, and besides the recovery only lasted a couple years before contracting again, then again a couple years after that.

            And Switzerland enacted multiple stimulus programs and the central bank set interest rates to 0%, and they’re not out of the woods yet. They also have one of the strongest social safety nets in the world–a not unimportant defense against recessions.

            1. There’s a reason you have to go to the 1920s to find a story that allegedly confirms your economic policy beliefs. True that there was a recovery without direct government action, but the recession (in real terms) was nowhere near as severe as the GD, and besides the recovery only lasted a couple years before contracting again, then again a couple years after that.

              A couple of years? More like 7-8, and the US economy entered a recession around 8 years after the end of the WW II. Using your logic that would nullify St. FDR of his supposed depression ending policies?

              I can go to the 1930s as well, Tony, courtesy of FDR’s treasury secretary

              “We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ? somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises. ? I say after eight years of this Administration we have just as much unemployment as when we started. ? And an enormous debt to boot.”

              And Switzerland enacted multiple stimulus programs and the central bank set interest rates to 0%, and they’re not out of the woods yet. They also have one of the strongest social safety nets in the world–a not unimportant defense against recessions.

              Switzerland’s Central bank has been intervening to keep their currency from gaining too much value against other currencies, this a far cry from you and Helicopter Ben’s policies in the last few years. Additionally, part of their stimulus involved tax relief, something you came out against in this thread. In the whole process, however, they managed to keep their budget intact, unlike the US.

              Also, The US set rates close to 0% and enacted multiple stimulus policies, and you’d be creaming your pants if the unemployment rate was less than 4%.

    4. What’s lacking here is a counterproposal to lower unemployment. You don’t have one? What a shock.

      It didn’t work in Japan. It didn’t work in the Great Depression. It isn’t working now. My plan is “First, stop doing shit that doesn’t work.”

      1. Plan for getting out of a ditch:

        Step One: Stop digging.

        1. No, dig up, stupid!

          1. No, you assholes! We have to bend the ditch downward!

        2. Your plan sucks – now we have a bunch of unemployed ditch diggers.

          What, do you think they are just going to walk out of the ditch and start a small business?

    5. What’s lacking here is a counterproposal to lower unemployment.

      What’s really lacking here is the line on the graph that the economic geniuses in the Obama administration promised us would be the unemployment rate if there was no stimulus. You remember that one, don’t you? It was about 1/4 of the way up the graph between the two. How about that for a couterproposal?

    6. “What’s lacking here is a counterproposal to lower unemployment”

      There isn’t any couterpropsal that involves government “doing something” that is worth mentioning.

      Since it is physically impossible for government to create jobs.

    7. Death camps. Absolutely guaranteed to work.

  18. “So why not tell your philosophical cohorts in government to shut up and let the only people with an idea THAT I AGREE WITH try to accomplish something.”

    FIFY

    1. I do try to agree with only those who are right.

      1. Barf.

  19. How does this chart show that the stimulus was ineffective? Looks to me like it shows primarily that forecasts about how bad unemployment was going to get were off by ~2%. It also shows that about 9 months after stimulus was passed unemployment started to go down. I won’t go so far as to say that shows stimulus worked, but what’s the basis here for claiming it didn’t work?

    1. It didn’t work by the very standards proposed by those who pushed it, for one.

      Second, you can tell by the shape of the curve, that it had no effect at all on the trends themselves.

  20. Even more dcepressing, I heard on Bloomberg today that the workforce is actually 500,000 smaller than it was a year ago.

    This economy is still contracting, folks.

    I won’t go so far as to say that shows stimulus worked, but what’s the basis here for claiming it didn’t work?

    Something works if it achieves its goals. The goal of the stimulus was to reduce unemployment as expressed by the blue line. It did not. Ergo, it failed.

    1. I am so tired of claims being made contrary to or without any evidence. If my executives went to the board and said nothing measurable happened after they spent a billion (scaling down to mere business numbers), they’d be fired. But for government, they can make any crap up they want, without any consequences. Absolutely absurd, what we tolerate.

      1. Claims either way lack evidence. The projections were too rosy (as the Obama admin has admitted), so sticking it to them for not getting it right is just partisan sniping.

        The fact is Obama’s economy has created twice as many jobs in 2 years as Bush netted in 8 years. You can look at this any way you like, but you don’t get a pass on evidence either. Everyone of all ideological stripes saw a depression on the horizon. So what prevented that? And how did recovery (weak as it is) happen despite these evil job killing programs and regulations?

        1. The only ones seeing a depression were the government and government worshipers like you. All those who said that world was about to end, were the same ones saying a few years before that that the economy was booming, and that everything was wonderful.

        2. “The fact is Obama’s economy has created twice as many jobs in 2 years as Bush netted in 8 years.”

          The fact is that Obama doesn’t have an economy.

          The private sector creates the economy – not government. In fact, it is the private sector that enables government to exist at all – not the other way around.

          1. Thank you for the meaningless platitudes.

            1. They are absolute facts.

              1. So the government doesn’t have an effect on the economy? Or only when those effects are bad? And how does the private sector enable the government? How do you have a private sector without contract laws and all sorts of other laws?

                1. The private sector is made up of people exchanging goods and services. People will exchange goods and services regardless of what type of government you have or if there is even a government at all.

                  The government can help faciliate this process, such as protecting contracts. Or it can hurt the process, such as by levying excess taxes. But the economy comes first.

            2. Frankly, your comments have been nothing but meaningless platitudes. That others write concrete factual statements that you then falsely label as “platitudes” show just how far from reality your understanding of the world is.

        3. If “claims either way lack evidence,” then why do you insist the only logical move is the one that costs trillions instead of the one that would actually save money?

        4. the jobs came from government payroll padding and war spending. Consuming rather than producing wealth.

        5. Obama claimed that he should be elected because he was just so much smarter than the GOP candidate. It is not “partisan sniping” to point out that Obama failed at what he claimed was his strong point.

          Second, the problem is that Obama continues to pursue anti-business policies, the HCR itself being a large reason slowing business growth … except of course for those getting “waivers” from its provisions – like McDonalds.

  21. For those of you considering debating Tony in economics, here’s a viable alternative that will yield the same results:

    1. Find a hard, stable surface.
    2. Bash your head against said surface.

    1. It’s like masturbation, only for pain.

      1. Masturbation *is* pain.

    2. I wonder if the “hard, stable surface” you have found is an ideology that’s that’s impervious to facts, data, analysis.

      1. It’s a reality-based surface.

      2. It’s actually a granite table top, but good guess.

  22. the conclusion drawn from this clever chart is disingenuous at best.

    the stimulus was passed in Q1-2009 when unemployment was already above projections.

    let’s say the stimulus took a few weeks/months to get off the ground. in Q3-2009, by the time any stimulus started to happen, again (and all together now) unemployment was already above projections.

    after that, unemployment plateaued and actually takes the trajectory of the projections only from a point higher because unemployment was (altogether now) already above projections by the time it was passed and higher further by the time the policy went into effect.

    thanks to sunsetting of the stimulus starting last year, procyclical forces of state and local cutbacks and a feckless Washington concerned more with more procyclical austerity measures have ground to a halt the meager and tenuous recovery that was occuring.

    but let’s go down this Cato rabbit hole of economics 101…what’s the preferred policy here? are we saying Comrade ‘Obambi’ should have revised his projections upward and asked everyone to scrap everything and hide their heads in the sand? are we saying that the moment Comrade ‘Obambi’ took office he unleashed a torrent of new and crushing govt regulation and other stuff that literally killed business? are we saying that with no stimulus official unemployment would have plateaued at about 10% in late ’09 and declined anyway? are we saying that if only Comrade ‘Obambi’ and his merryband of Congressional Leninists resigned on January 21st and proclaimed McCain or Ron Paul emperor for life on the 22nd that we’d be back down around 5% unemployment today?

    1. To me there’s nothing clever or disingenuous about the chart–though the words around it are a different matter. The chart simply and plainly shows 2 things: 1) the reality of unemployment overshot initial forecasts; 2) after stimulus unemployment began declining at a rate roughly consistent with forecasts.

    2. are we saying that the moment Comrade ‘Obambi’ took office he unleashed a torrent of new and crushing govt regulation and other stuff that literally killed business?

      Reagen took office and the recession ended Clinton took office and the recession ended. Bush took office and the recession ended.

      It has been 2 and a half years since Obama took office and the recession just took a double dip.

      Give Obama a six month or 1 year piece of slack, Fine I am ok with that.

      But after 2 and a half years the economy is now Obama’s and if it is shitty like it is now he does get the blame for it.

      1. Bush will be blamed up to January 21, 2017. (I am still predicting that, despite his economic performance, Obama will be re-elected, mainly because he is still able to portray himself as “fighting for the ordinary American, not the rich.” (A theme you will hear a lot of in the next 18 months.)

        [I do agree with your essential point. My rule of thumb is that you have 18 months to work out the problems that were left over from the previous administration. After that, it’s your problem.]

        Addendum: The problems with Obamacare and the Lybian War are entirely Obama’s, however.

        1. BTW: What’s the genitive case of the latin form of Lybia? I suggest the President should now be referred to as:

          Barack Hussein Obama Lybianus.

          1. I’m going to screw this up, but maybe Africanus Novus would be the best to use. Libya was in Africa Nova.

            1. “Africanus Novus”

              I have no intention of going within 50 miles of that as a cognomen for the current President.

              “Lybianus” (with emphasis on the last two syllables) it shall be.

              1. Labianus.

                1. ….a grass crown and a “Victory Procession.”

        2. I am still predicting that, despite his economic performance, Obama will be re-elected, mainly because he is still able to portray himself as “fighting for the ordinary American, not the rich.

          Unless there is a major uptick in our economy Obama will lose in 2012 worse then Carter lost against Reagen in 1980.

          1. I really think this is inevitable. What’s scary is that the field arrayed against him looks horrific, with the two libertarianish exceptions.

            1. What’s scary is that the field arrayed against him looks horrific

              I think this is the huge disconnect with the popular view of what elections are and what they actually are.

              Elections are not about putting the right guy into power, they are about punishing the wicked.

              1. Well, I’m feeling like collateral damage.

                1. Well, I’m feeling like collateral damage.

                  Hyperbole is fun…even better when it conceals a hidden truth.

                  The purpose of democracy is not to create some sort of universal consensus or legitimacy for the state or some imagined mount for humanity to climb up into liberal fantasy land. The point of democracy is to prevent civil war.

                  We have elections so that we do not have bloody revolutions.

                  1. Interesting take…

          2. Unless there is a major uptick in our economy Obama will lose in 2012 worse then Carter lost against Reagen in 1980.

            I think it is going to be 1936 all over again. As can clearly be seen by the Team Blue posters on this thread, Obama has a cult following that is not going away. Further, Team Blue will be playing the “Team Red is going to take away your Obamacare/Medicare/Social Security” card in a big way.

            As I have said here before, Obama will win unless the Misery Index hits 14.

            1. 1936 in the United States, right? Not Europe.

            2. I think it is going to be 1936 all over again

              The Republicans took the house and gained a shit pot of senate seats in 1934?

              Team Blue posters on this thread, Obama has a cult following that is not going away

              I suggest you read Matt’s and Nick’s new book that is coming out at the end of the month.

              Independent voters will decide the 2012 election not the dead end 20%ers like Tony and Max.

              Obama will win unless the Misery Index hits 14.

              The Misery index is a measure of unemployment and inflation but mostly Unemployment.

            3. If the anti-war sentiment picks up and some of the major media emerge from the fog of Obama-worship and actually attack Obama for his military pretensions (Barack loves the Commander-in-Chief role) and the wars’ effects on the economy and how domestic looting goes hand in hand with aggressive foreign policy……! maybe not, the vast majority of the anti-war crowd has either gone silent or joined the Obama team…..

  23. I like how Obama’s predicted numbers are all below the magical “no President will get re-elected” %8 and how the real numbers are all above it.

    1. Your racism has been noted by those who note such things. And by those who note those who note such things.

  24. Government predictions have the same success rate as astrology, yet the majority of the worlds population faithfully swallow the next prediction with zero hesitation.

    1. One scam is about the same as another.

  25. The notion that governments can achieve economic prosperity by increasing the money supply is not a new one. One could look to the 19th century populist movement in the United States to find a group that supported the erroneous idea that we can inflate our way to prosperity. And the idea, on a superficial level, makes sense. When your income is increased, you can buy more goods and services; you’re wealthier. So naturally, if everyone has more money, everyone is wealthier, right?

    Wrong. Money is simply a mechanism used to overcome the problems of direct exchange. Increasing or decreasing it cannot magick more goods, services, or factors of production into thin air.

    I’ll illustrate this with a story. Let’s say there exists a town where everyone’s savings are $500. Then, as if by magic, all of their savings are doubled overnight. Is anyone richer as a result? Of course not. More cows didn’t appear for the farmers to milk, more ore didn’t appear for the miners to mine, and more wheat didn’t appear for the baker to bake. As Robert Heinlein put it, “There ain’t no such thing as a free lunch”; we can only become materially wealthier by producing more goods and services. This observation is known as the optimal money supply theory, that is, that society cannot benefit materially from increases or decreases in the money supply and as such it should be frozen.

    In the same vein, fiscal stimulus can simply rearrange the structure of production, and if pursued too recklessly shorten it, but can never lengthen it. As Nick Gillespie pointed out in a previous comment, Obama is simply drawing resources out of the private sector and putting them into the public sector. This makes it more difficult for private firms to operate as they now have fewer resources to command, and thus have to pay higher prices for them. If I take a dollar from my right pocket to put it in my left, do I now have two? Moreover, there are sunk costs associated with all of these stimulus activities. We’ll never be able to reclaim the lost labor time spent on repaving workable roads. All the fabric spent on making uniforms for construction workers is less fabric used to make shirts, jeans, and other clothes for consumers. We could end unemployment by mandating that all the unemployed build pyramids just to knock them down again, but we’ll be robbing ourselves of all the resources spent on such an asinine endeavor.

    And while it cannot be denied that austerity measures will cause more unemployment in the short run, we need to look at its effects on the long run. All those resources trapped in the public sector will be put at the finger tips of the private sector. The increase in the supply of land, labor, and capital will lower the cost of the factors of production, enabling firms to once again produce at a profitable level. But this time, we’ll be getting goods and services which consumers actually desire as opposed to government boondoggles.

    This explains why 1946 was such a boom year for the American economy. With many of the New Deal programs abolished and the war time restrictions on business overturned, not to mention the sudden influx of labor from the discharged troops, it’s no wonder that the private sector performed so well. Had Harry Truman listened to the advice of his economic advisers and had kept military spending in place, we would have seen the standard of living continue its decline just as it had during the Great Depression and World War II. And what, after all, is the point of employment that does not increase one’s material well-being? Those who view full employment as an end can look to North Korea, Maoist China, or Stalinist Russia to see the “benefits” it bequeaths on a populous.

    So we could listen to the Tonys and Paul Krugmans of the world and continue to pump money into the economy; after all, their graphs, though based on faulty premises and bad logic, are very pretty. Or we could dare to do the impossible: not have government do anything at all.

    1. I’ll illustrate this with a story.

      That’s where I stopped reading.
      Don’t you have any pop-culture references?
      I hear The Jerk is a classic.

      1. That’s where I stopped reading.
        Don’t you have any pop-culture references?
        I hear The Jerk is a classic.

        The story is barely a paragraph, but you can skip it if you’d like.

  26. I’m surprised they haven’t just built a huge golden statue of Obama yet. That would create jobs (although, if you’re like me, you’d rather be broke than help build it).

  27. Is there anyone here too stupid to see the right half of the graph, where unemployment goes… down… betweeen Q3 2009 and now?

    Six months after the stimulus plan passed, unemployment began to go… down. How exactly is this evidence that the stimulus “didn’t work”?

    Obviously, the stimulus did not achieve the targets requested, but it was passed and unemployment went down.

    You people are on auto-pilot.

    1. “Correlation is always causation except when it disagrees with my ideology. Basically I don’t know anything about economics, but I can read statistics pretty well.”
      –Any given neo-Keynesian

    2. Obama signed the stimulus bill on Feb. 18th, 2009.

      U-3 Unemployent in Feb 2009 was 8.6%, in Feb 2010 it was 9.7%, and Feb 2011 it was 8.8% (currently at 9.1%)

      U-5 Unemployment in Feb 2009 was 9.8%, in Feb 2010 it was 11.0%, and in Feb 2011 it was 10.3% (currently at 10.3%).

      U-6 Unemployment in Feb 2009 was 15.6, in Feb 2010 it was 17.0%, and it was 15.7% in Feb 2011 (currently at 15.8%)

      In all cases, unemployment is higher than it was when the stimulus started. How is that a success?

      Now you may say I’m being disingenuous because I’m not comparing to peak levels, but the highest drop was 1.6% in U-6 from peak. How is spending 787 billion for a 1.6% drop from peak considered a success?

      Data here(have to check boxes and and request)

      1. You don’t understand, Mr. Chartreuse. If we had just spent trillions as opposed to billions like Paul Krugman (winner of the coveted Nobel Prize in Economics, mind you) said, then we’d be out of this recession by now.

        Why do you hate America, Mr. Chartreuse?

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