Stan posted a short essay on his views on stimulus, which I thought had enough academic merit to deserve a response. I'll respond to the main points not every single statement.
[QUOTE=Stan Da Man;412329]And the dire H1N1 warnings were all supposedly based on legitimate science.[/QUOTE]The dire warnings were not necessarily of what would happen but what could happen. It did meet the WHO criteria of a pandemic. Given the data available at the time the steps taken were prudent.
Your main point here is that so-called legitimate predictions based on science (or economic models, etc) are sometimes wrong. Well of course this is true. Sometimes wrong, sometimes right. Such as those few economists who predicted back in 2005-07 that the US was on the verge of a housing / financial meltdown and deep recession.
If you wanted to remind us that predictions aren't accurate all the time, fair enough.
[QUOTE]Now, we come to the multiple "Stimulus" efforts that have been deployed, and the new ones that are being proposed. Conventional wisdom, based on what the media feeds us, is that stimulus programs were necessary because we were in a recession. But, we've been in many other recessions and came out of them without anything that approaches the massive spending done by this administration. Yes, they claim, but this recession was [I]really[/I] bad, and desperate times call for desperate measures. Not so fast. The recession now is [I]really[/I] bad, based on its length and the unemployment rate alone, but those were the things all this stimulus spending was supposed to fix. The only response you generally get is, "well, it would have been worse without the massive spending. " There's nothing to back it up.[/QUOTE]See how quickly you segue into right wing exaggerations of "nothing to back it up".
For one, we just had the news from NBER that the recession officially ended in June 2009. Which was 4 months after the Stimulus (ARRA) was enacted. Coincidence? Doubtful.
We have reports that ARRA boosted employment by 2.5 million to 3.6 million jobs and raised the nation's annual economic output by almost $400 billion. These conclusions are backed by economists at Goldman Sachs, IHS Global Insight, JPMorgan Chase and Macroeconomic Advisers, who say the stimulus boosted gross domestic product by 2.1% to 2.7.
[url]http://www.usatoday.com/money/economy/2010-08-30-stimulus30_CV_N.htm[/url]
[url]http://cboblog.cbo.gov/?p=1326[/url]
[QUOTE]The only "science" that suggests these programs were necessary or even worthwhile are based on economics. They call economics "the dismal science" for a reason: It got its name after Thomas Malthus projected that population growth would cause a parade of horribles, eventually leading to starvation and death for much of mankind. He was dead wrong, and the name stuck, if only as a reminder that economic models are notoriously inaccurate.[/QUOTE]A feeble attempt to discredit economics. Of course it is an imperfect science, but it still plays an important role in both the public and private sectors.
[QUOTE]So, why does anyone take it seriously when the current administration, based on so-called "expert" economists, concludes that any of the stimulus packages were necessary? To the extent that any of these "experts" provide any basis for their conclusions, it almost invariably is predicated on some Keynesian economic principle that is questionable [I]at best[/I]. Real world data debunks nearly every Keynesian theory. It's junk science, yet we're led to believe that billions in spending was and is necessary because these junk scientists tell us so.[/QUOTE]More unconvincing discreditation of economics and economists.
This whole episode we've been through of financial sector failure, followed by successful government intervention via TARP and ARRA will go down in history as one of the greatest validations of Keynesian theory.
This report from Mark Zandi and Alan Blinder analyzes the combined effect of the government's responses:
[i]"For example, we estimate that, without the government's response, GDP in 2010 would be about 11.5% lower, payroll employment would be less by some 8.5 million jobs, and the nation would now be experiencing deflation. "[/i]
How the Great Recession Was Brought to an End
[url]http://www.economy.com/mark-zandi/documents/End-of-Great-Recession.pdf[/url]
[QUOTE]What proof is there that these Stimulus programs were unnecessary? Of course it's impossible to "prove" now, but the best evidence is historical. In only one recession have we even approached the record level of stimulus and deficit spending that has been happening. It's called "the Great Depression, " and it lasted longer and was deeper than any other recession. By comparison, Europe did not engage in anywhere near the government stimulus FDR rammed through (measured as a percentage of GDP), and its economies recovered more quickly and its unemployment rate stayed lower at all points than the USA. In all other recessions, we have not spent anywhere near what this team has, and we suffered less (measured in nearly any way possible) and emerged more quickly. So, you can't conclusively prove what would have happened without the massive stimulus, but the smart money bets on experience.[/QUOTE]You're free to put more weight on historical comparisons. I'll put more weight on the analysis of respected economists who factored in the unique elements of the latest recession.
[QUOTE]So, if it's not the junk scientists with their demonstrably false Keynesian models, [/QUOTE]You've established that only in your own mind.
[QUOTE]then who should we believe as to why stimulus spending is necessary? Obama and Geithner? Geithner's the same guy who either can't figure out how to pay his taxes, or was attempting to evade them. We've either got a buffoon or a crook running Treasury, yet we're supposed to trust him to spend nearly a trillion dollars wisely. This is the same pair who went to the G-20 meeting in June to trumpet the success of the USA stimulus packages and to chide Europe for even thinking about cutting spending to get their budgets in line. [url]http://www.businessweek.com/news/2010-06-26/geithner-says-g-20-needs-focus-on-domestic-demand-not-deficits.html[/url]
They were laughed out of the room by European leaders, particularly Germany, which cut spending instead. Turns out, Germany had the first and last laugh. Their economy is healthy by all accounts, while the Obama / Geithner Stimulus has succeeded only in driving up the deficit. The Obama-led Stiimulus does feed his arguments, though: He claims we [I]can't afford[/I] tax cuts for the wealthy. Why not? Well, because he was so busy blowing our wad on worthless Stimulus projects. (He usually forgets that last part in his stump speeches) [/QUOTE]Geithner's tax issue has zero to do with the argument of whether the Stimulus was worthwhile or not.
And a comparison with Germany is possibly the poorest argument of the bunch. Germany did not have a giant housing bubble with massive financial leverage tied to it. Nor the same spike in unemployment. And yet they still had two stimulus packages worth $104B, which are credited with helping the German recovery. There is a case here that the US stimulus was in fact too small.
[QUOTE]These are the sorts of issues that are driving the Tea Party. It's one thing to raise taxes for worthwhile projects. But, taking other people's money is justified only when the government gets its house in order and cuts all the wasteful spending that is abundantly apparent. ObamaCare and cash for clunkers are but two of many examples, and they are on top of the worthless Stimulus programs. Obama's "wish list" spending proposal today is just more evidence. Dems may think that the Tea Party is driving a wedge between the Republican party. But, the truth is, the Tea Party is symptomatic of the general disgust at the misguided policies and wasteful spending that has occurred and is still being proposed by this administration. Absent this, the Tea Party wouldn't exist. Come November, thankfully, we'll be done with all of these ludicrous stimulus proposals, brought forth by a team that couldn't govern its way out of a paper bag.[/QUOTE]You sure convinced me! Great job.
BTW, the Stimulus/ARRA included $288B in tax benefits. Was that part also worthless?
If we hadn't had a stimulus and now had even higher unemployment, you can bet almost everyone in the country would be complaining that the government didn't do anything.
