News Germany's Economic Recovery Despite Lack of Stimulus

[Gokul43201]

It struck me as an attempt at trolling (still does), but I must admit that I very often can not determine the point you are attempting to make in a post. As is the case here. I don't see how anyone can reasonably blame the difficulty of modeling on the level of experience of a President. If anything, your earlier post suggests a predictability (desire to outspend, no matter what) rather than the opposite. Adding additional descriptors of unfavorability does nothing to forward a meaning argument, but it does serve as a useful smear.

You clearly posit that the situation inherited by the President counts as being "uncharted waters", yet blame the President for taking measures not taken previously. You call his (historically large) tax cuts a waste of money yet berate his party as being taxers when all they have done for the past two years is heap on tax cuts over tax cuts. You use words like "disfunctional" as though they have very special meaning to this particular Congress over any other in history. Or as though it has any relevance to the actual question about real interest rates.

 

[WhoWee]

It struck me as an attempt at trolling (still does), but I must admit that I very often can not determine the point you are attempting to make in a post. As is the case here. I don't see how anyone can reasonably blame the difficulty of modeling on the level of experience of a President. If anything, your earlier post suggests a predictability (desire to outspend, no matter what) rather than the opposite. Adding additional descriptors of unfavorability does nothing to forward a meaning argument, but it does serve as a useful smear.

You clearly posit that the situation inherited by the President counts as being "uncharted waters", yet blame the President for taking measures not taken previously. You call his (historically large) tax cuts a waste of money yet berate his party as being taxers when all they have done for the past two years is heap on tax cuts over tax cuts. You use words like "disfunctional" as though they have very special meaning to this particular Congress over any other in history. Or as though it has any relevance to the actual question about real interest rates.

If you read my post carefully, I made comment that we are in uncharted waters - which is true. Then I listed a few of the variables (as I see them). Then I commented "I don't know if anyone can model all (or any) potential outcomes with any degree of certainty?"

How is this trolling? I think any attempt to move us in the right direction must factor in all variables and be highly focused and responsive to change.

Admittedly, I don't believe we should engage in any more massive spending programs packed with nonsense either.

 

[Gokul43201]

According to an exhaustive report by the SF Fed, the effect of the stimulus bill on the job market was negligible.

http://www.frbsf.org/publications/economics/papers/2010/wp10-17bk.pdf

Thanks for the link t2g. I haven't seen this one before. I'll take a look at it over the weekend, when I find a little extended time. I'll maybe also post citations for the other estimates that are in literature - I've seen at least one or two besides the CBO report.

 

[mheslep]

Most estimates I've seen say that the Stimulus Bill saved/created on the order of a million or so jobs as of several months. I don't know how many of those were specifically attributed to the tax cuts.

I don't see how that it can be so, that most estimates you've seen show this, given previous expression of some fairly wide reading. Here's another contrarian voice:
The Obama Stimulus Impact? Zero, by JOHN F. COGAN AND JOHN B. TAYLOR

Here's why:
http://sg.wsj.net/public/resources/images/ED-AM693A_cogan_NS_20101208193002.gif

The bottom-line is the federal government borrowed funds from the public, transferred these funds to state and local governments, who then used the funds mainly to reduce borrowing from the public. The net impact on aggregate economic activity is zero, regardless of the magnitude of the government purchases multiplier.

This behavior is a replay of the failed stimulus attempts of the 1970s. As Gramlich found in his work on the antirecession grants to state and local governments: “A large share of the [grant] money seems likely to pad the surpluses of state and local governments, in which case there are no obvious macrostabilization benefits.”

The implication of our empirical research and Gramlich’s is not that the stimulus of 2009 was too small, but rather that such countercyclical programs are inherently limited. The lesson is to beware of politicians proposing public works and other government purchases as a means to stimulate the economy. They did not work then and they are not working now.

 

[Gokul43201]

I don't see how that it can be so, that most estimates you've seen show this, given previous expression of some fairly wide reading.

I'm unable to parse this sentence correctly. Could you clarify or rewrite?

Haven't looked into your links yet - reading for the weekend. Thanks.

 

[mheslep]

I'm unable to parse this sentence correctly. Could you clarify or rewrite?

Haven't looked into your links yet - reading for the weekend. Thanks.

Sorry. I meant: given your own background research on display in various posts, I don't see how its possible that "most" all of the economic writers you've come across say the stimulus created million(s?) of jobs.

 

[Gokul43201]

I'm not sure exactly what I have displayed in previous posts, but I think I have made mention of (and hopefully cited) at least two, possibly three different papers that, if I recall correctly, estimated on the order of a million jobs saved. I don't believe I'm misremembering that number, though it is possible. And I do recall that you had an objection to a paper co-authored by Zandi. I think I may have subsequently read another report - I'd have to do a search to confirm. As promised earlier, I will get to posting sources this weekend. I think it would be good to have all the literature collected in one place, so people can read and discuss the merits or problems with each of them.

If you recall something specific from my posting history that contradicts what I'm saying here, please fell free to set the record straight.

Edit: To clarify, I'm not talking about economic writers expressing an opinion on job creation, or lack thereof. I don't actually recall many (any?) such economic columns that actually propose a number for jobs created/lost, except perhaps "zero". I am referring specifically to papers that perform a full calculation of the numbers.