Posted on 09/19/2009 5:08:14 AM PDT by Son House
Administration economists cited Keynesian models that predicted that the $787 billion stimulus package would increase GDP by enough to create 3.6 million jobs....more modern macroeconomic models predicted only one-sixth of that GDP impact.
Consider first the part of the package that consists of government transfers and rebates.
The nearby chart reviews income and consumption through July
(DPI)--the total amount of income people have left to spend after they pay taxes and receive transfers from the government--jumped. The increase is due to the transfer and rebate payments in the 2009 stimulus package. However, as the chart also shows, there was no noticeable impact on personal consumption expenditures.
This is exactly what one would expect from "permanent income" or "life-cycle" theories of consumption, which argue that temporary changes in income have little effect on consumption. These theories were developed by Milton Friedman and Franco Modigliani 50 years ago, and have been empirically tested many times. They are much more accurate than simple Keynesian theories of consumption, so the lack of an impact should not be surprising.
Indeed, one need not have looked any further than the Bush administration's Economic Stimulus Act of 2008 to find plenty of evidence that temporary payments of this kind would not jump-start consumption. That package made one-time payments and rebates to people in the spring of 2008, but, as the chart shows, failed to stimulate consumption as had been hoped.
... the resilience of the private sector following the fall 2008 panic--not the fiscal stimulus program--deserves the lion's share of the credit for the impressive growth improvement from the first to the second quarter.
...it is important to continue assessing the role played by the stimulus package
...These assessments can be a valuable guide to future policy makers in designing effective policy responses to economic downturns.
(Excerpt) Read more at online.wsj.com ...
Administration economists cited .....Kenyasian .......models
We KNEW the stimulus wouldn’t work BEFORE they passed it!
I am NO economist. I’m not even a businessman, but I KNOW that the ‘stimulus’ was nothing more than a PAYBACK to the many organizations that helped democrats get their power back.
Who REALLY thought the ‘stimulus’ bill actually would ‘stimulate’ ANYTHING?!? -maybe liberal appetites...but that’s all...
Conservatives have wisely quit spending money and are saving every cent they can for the future inflation that is sure to come as the dollar continues to collapse.
Until the msm recognizes this economic fact of life, they will continue to be puzzled by the failure of BO’s outrageous Porkulus Bill.
Quit spending on consumables, but don’t forget to buy capital improvements if they are needed.
The only ‘shovel-ready’ jobs were the myriad pseudo-jobs available for the asking, for those who were ready to shovel the massive piles of bullsh*t that were being produced by this White House on a daily basis.
If you believed that inflation is on the horizon, the last thing you’d want to do is save money. You need to turn your money into something real.
Did everyone look at the chart very very carefully?
The exact peak, the exact highest point in the chart measuring “personal consumption expenditures” is the exact time when Obama was NOMINATED for President by the DNC.
People who had a brain and who had a job could see it coming ———
and acted accordingly.
Gee, what a big surprise!!!
Americans fleeing from a O Communist future administration; hiding thier assts, shutting down, stopping thier spending their borrowing, their consuming.
THAT’S the cause of this “recession”; it didn’t just happen in a void, for no reson, it happened and is happening and will continue to happen as long as Obama remains in office.
No missile shield, no F-22 fighters for us or our allies -——— sure way to increase confidence in consumers and citizens in their future.
No mystery at all.
Just everyone too gutless to say it out loud.
Oh please Mr. Obama don’t taze me, don’t put me in with the other 25,000,000 Americans in your concentration camps that your SDS and Weather Underground buddies so desired to make in the 70s!!!!!!!!!
I promise to be a good little slave, a good little sheeple.
Not.
Here: see for yourself !!!
http://www.youtube.com/watch?v=_9peonVh26A
http://www.youtube.com/watch?v=6GrCHctYyWA
It didn’t work because it was never intended to work. Its purpose was to reward those who voted for the Marxist Messiah, not to stimulate the economy.
There will be a recovery (it's happening very slowly) and what conservatives need to do is have an argument ready to deny the credit to Hussein. You know the Press will be patting him on the back.
Problem is, the people that will fall for this don't know what "Keynsian models" are and they won't read articles like this.
Yep, my question, In a mutual fund, is the inflation of the stock price of companies that survive going to be enough to cover the companies that won’t exist thanks to Democrats?
Problem is, the people that will fall for this don’t know what “Keynsian models” are and they won’t read articles like this.
point
Not just something real - consumables are 'real' but lose value rather quickly. You need something that is physical, portable, tradable, relatively rare, and can act as a hedge against inflation.
I almost missed that ;-)
While I have to admit that reading this article took me back to my undergrad days as an economics major (and made my hair hurt), they make a most persuasive case. I hope other more colorful writers and commentators will pick up on this. It is a story that needs to be told.
The Bush tax cuts brought the economy back from the brink after 9/11. People quicky forget not only the attacks on our people and freedom, but also the devastation on our economy.
President zero is illiterate in more than just economics. We have elected a person who has NO real knowledge or understanding of civics, economics, history, or leadership.
Being incapable of leadership is why he has enlisted so many so-called czars to help him govern while he himself is off to photo-ops and presenting a happy face for his move to change the country.
I am amazed that Keynesian theory is debunked time after time and the left continues to swear by it each time it fails. Little Robert Reich among them, who proudly wears the Keynesian badge of failure.
The economy must be truly awful for people to have to wear filthy, worn-out rags like this. Riding the rails takes a terrible toll on clothes. I wish this young man could find his way to a shelter and get some new clothing so he doesn't freeze to death in the coming winter.
Yes, consumables should be limited with or without inflation. Virtually any physical thing would be a hedge against inflation as long as other people would desire to own it. Gold and silver have worked well except in extreme situations.
This article is RACIST
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