Posted on 09/04/2010 6:34:06 AM PDT by SeekAndFind
Next week, President Obama is scheduled to propose new measures to boost the economy. I hope they’re bold and substantive, since the Republicans will oppose him regardless — if he came out for motherhood, the G.O.P. would declare motherhood un-American. So he should put them on the spot for standing in the way of real action.
But let’s put politics aside and talk about what we’ve actually learned about economic policy over the past 20 months.
When Mr. Obama first proposed $800 billion in fiscal stimulus, there were two groups of critics. Both argued that unemployment would stay high — but for very different reasons.
One group — the group that got almost all the attention — declared that the stimulus was much too large, and would lead to disaster. If you were, say, reading The Wall Street Journal’s opinion pages in early 2009, you would have been repeatedly informed that the Obama plan would lead to skyrocketing interest rates and soaring inflation.
The other group, which included yours truly, warned that the plan was much too small given the economic forecasts then available. As I pointed out in February 2009, the Congressional Budget Office was predicting a $2.9 trillion hole in the economy over the next two years; an $800 billion program, partly consisting of tax cuts that would have happened anyway, just wasn’t up to the task of filling that hole.
Critics in the second camp were particularly worried about what would happen this year, since the stimulus would have its maximum effect on growth in late 2009 then gradually fade out. Last year, many of us were already warning that the economy might stall in the second half of 2010.
So what actually happened? The administration’s optimistic forecast was wrong, but which group of pessimists was right
(Excerpt) Read more at nytimes.com ...
If they increased government spending by a gazzillion, then you’d increase GDP by a gazzillion.
RE: Let’s see, according to Krugman... they spent $1.5 Trillion and the GDP grew to 1.6% (latest figures).
Therefore, to reach an emerging-market like 10% GDP, we need to spend $15 Trillion !!
Brilliant, just brilliant.
Krugman = JournOlist
Zactly
LOL!
The economy ain’t dead guv’ner, it’s just pining for the fjords...
The government spending more money is like pushing on a piece of string, and with interest rates near zero, the Fed is slap out of bullets.
Oh, and Paul, if the 0bama administration lets the Bush tax rates (credits, etc.) expire, you will see how well your Keynesian economics have worked.
Krugman is a Keynesian kook.
5.56mm
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