Intermarkets' Privacy Policy
Support


Donate to Ace of Spades HQ!





Recent Entries
ę Flashback: The Onionís Great Piece on the 9/11 Hijackers Shortly After the Attacks | Main | Old And Busted: Democrats Say Politicizing 9/11 Is Wrong. New Hotness: Obama To Take Victory Lap At Ground Zero. Plus: Will Obama Release Photos Of Bin Laden? Ľ
May 02, 2011

Multiplying Failures: Two Papers Suggest Possibility That Not Only Didn't Stimulus Help Us, It Might Have Hurt Us

The idea of the "fiscal multiplier" is that for every dollar of government stimulus spending you generate some other number of dollars in actual economic impact.

If you spent $1 but got $2 out of new economic activity out of the deal, you'd have a spending multiplier of x2. Which would be "good," in the sense you're getting ban for your buck.

Liberal economists (and then liberals generally) always claim the "commonly-accepted" fiscal multiplier for stimulus is 1.4x. For every $1, we "make" $1.40. This is why Paul Krugman believes, insanely, that there is virtually no limit to how much the government can/should spend -- we're always coming out ahead on the deal!

But in fact, that "1.4x" is not "commonly-accepted," except for die-hard leftists and former Enron shills like Paul Krugman, and it's incredibly unsophisticated to speak of it that way anyway -- there is no common multiplier at all. It depends on what the stimulus is spent on, and the conditions and circumstances of the country in which it is being spent.

Krugman's know-nothing, just-barely-above-the-100-level-in-college-economics "1.4x" multiplier is actually based on the best, most impactful type of stimulus (I think increases in personal spending power -- like tax cuts or other real-income-increasing measures) and only for the economy of the 1930s United States, which isn't much at all like the current economy.

So you need to be more nuanced than the ignorant, redneck tractor-pull-cheering backwater ignoramus Paul Krugman in guessing at a multiplier.

Much of Obama's stimulus was spent on the least stimulative sort of spending at all, subsidies for state and local government, which is just used to jigger around debt, and isn't spent (and hence can't multiply at all).

So, given the type of stimulus Obama -- or I should say Professor Emeritus of Economics Nancy "The Word is The Word" Pelosi -- inflicted on the country, and given the type of economy this country now has (post-industrial), what was the multiplier?

Well, for starters, it was less than 1. So, like, for each dollar we spent, we got, say, 70 cents out of the deal. That's a stone-cold loss.

But it could be worse than that: Because we're exactly the sort of country (not growing quickly, developed, heavily indebted) where each dollar of stimulus actually has a negative multiplier, that is, you're not merely losing the dollar you spent but actually subtracting money from your economy when you spend.

But Obama's a frigging genius. So, there, wingnuts.



digg this
posted by Ace at 07:32 PM

| Access Comments




Recent Comments
Vendette: "McConnell has already said he'll go back to the ol ..."

Bitter Clinger and All That: "Posted by: Lizzy at October 01, 2014 07:42 PM (D/5 ..."

Feh: "You all see that Elbert Guillory ad against Landri ..."

The Progs: " Where's Muldoon? Did his dog eat him? ..."

Bitter Clinger and All That: "I haven't gone back to my PCP since '13 when I cam ..."

Lizzy: " >>Michelle won't campaign for Senators she ..."

Carol: "Jeb shouldn't campaign for anyone. I saw what Ace ..."

JackStraw: "What the hell is going on in Oklahoma? MOORE, O ..."

weft cut-loop[/i] [/b]: "[i]E) We can't even come up with, among ourselves, ..."

B: "House Minority Leader Nancy Pelosi (D-CA) predicte ..."

Guy Mohawk: "McConnell has already said he'll go back to the ol ..."

Feh: "186 Good post. "The Democrats are appealing ..."

Recent Entries
Search


MuNuvians
Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
News/Chat
Archives
Powered by
Movable Type 2.64