From Gang8:
I have long been persuaded that we will ultimately run into a stonewall with our debt dilemma and how to handle it. The solution so far has been to let the less well placed individuals of society bear the burden. This is the austerity programs that are imposed. And it is getting us nowhere. We are cutting down the economies through austerity programs, we are cutting down the welfare system, we are cutting down health and education and so on. [...] This reduces and cuts out purchasing power from the economy, and the purchasing power is what keeps the wheels of industry going.
And this:
We have seen it playing out in Europe now where they have taken steps, one after another, and they basically have not identified the problem. And if you have not identified the problem - and you cannot do that with modern monetary economics - when you cannot identify your problem, you cannot design a solution for it. You must know what your are talking about, and they don't. You have a system overburdened with debt and the solution cannot be to add more debt to it.
4 comments:
Off topic inquiry. I have monitored the "stimulus watch" widget on your blog. Amazing that only a little over half has reached "main street" (maybe). I just came across this working paper that conducted a survey of the businesses that received ARRA funds. Basic conclusions: 2/3 of businesses receiving funds reported having "adequate-plenty"(paraphrasing) of business BEFORE receiving funds and roughly half of the people they hired as a result of getting ARRA funds were "poached" from other industries. Seems like this info, paired with actual amount of ARRA funds dispersed, violate at least two of Larry Summers stimulus requirements: Timely and Targeted. The study is a quick read and just wondered if you give the results any credence given the data they collected. Your (and anyone else who reads this) opinion/thoughts is/are greatly appreciated.
Opps...here is the link to the paper....
http://mercatus.org/sites/default/files/publication/Did_Stimulus_Dollars_Hire_The_Unemployed_Jones_Rothschild_WP34.pdf
Your link Figure 2 is based on "all 277 workers hired" -- a pretty small sample.
I always figured the Stimulus Watch allocated percentage was low because it excluded the "tax cuts" portion of the $787 billion. Don't know if that is true, however.
Eleven uses of the word "Keynesian" in ten pages.
In the conclusion (page 10) the overall view seems to be that the purpose of the stimulus was to create jobs.
I think the purpose of the stimulus was -- or should have been -- to generate spending.
I hate to resort to ad hominem, but I'm not going to let that stop me. You really do have to consider the source. Mercatus and G. Mason U. are bastions of libertarianism. You simply cannot expect a realistic assessment from them.
Frex: In the introduction we find this notable quote.
Thus, there was an almost even split between “job creating” and “job switching.” This suggests just how hard it is for Keynesian job creation to work in a modern, expertise-based economy: even in a weak economy,
organizations hired the employed about as often as the unemployed.
Does this strike you as a per-conceived conclusion in search of a cherry to pick?
Those more than half of the hires who do represent job creation are simply dismissed with the wave of a hand. This actually seems pretty successful to me. But, as Art pointed out, the sample is ridiculously small.
Though there are only 10 pages of actual text, I doubt I have sufficient masochism to subject myself to them.
Cheers!
JzB
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