US Stimulus Boosted Growth by Up to 4.5%

The CBO simply said given these models and these assumptions this is the answer. Whether one says 4.5 or 1.7% or -5% depends on the assumptions one throws into the model. For a glimpse at the process just replay the debate on health care savings and what the CBO actually certified. They are given the assumptiosn. It's all political b.s.

I see.

But "supply side" isn't "political b.s."?

stevejhx. The' stimulus' should have been 3 trillion. We would've grown by 12% in the second quarter. Great way to run a government steve. The deficit is 14 trillion steve, the country is bankrupt. You're a real genius!!

We need to tax the rich.

Hey Julia. We spent some of those trillions on better batteries. You can thank Obama for your longer lasting dildo.

The stimulus was a joke. The government threw huge sums of money, paying people to buy cars and homes, furnish those homes with new appliances and then weatherize those same homes we paid them to buy undoubtably. Then it paid the banks ot modify mortgages.

So let's see what we learned, shall we? If you give someone an 8k tax credit, they'll buy that house a little sooner. Brilliant. Now we spent the money, stole from future demand, didn't create any lasting demand or any lasting increase in jobs, and saddled the economy with even more debt that will have to be repaid.

Julia's right, we should have just printed 3 trillion handed it out to every citizen in exchange for rocks in their backyard or old socks if they don't have rocks and the keynsian multiplier would assure us that the recession would be over immediately.

I don't see how any of this resulted in innovation, job creation or entrepenurship.

1) any analysis like this comes with significant assumptions, so I don't see any "I told you so" conclusions from this...but 2) and more importantly, we should be worried about what the stimulus is doing long-term. Anyone can throw money into a system and boost the economy for a quarter, but if it didn't create jobs and help Americans deleverage, then all it did for the long-term was increase debt. Do we really think this housing credit did any good? It just continued to prop up a market that needs a serious correction, in an attempt to keep housing unaffordable based on incomes.

Sometimes we need to take our pain for the longer-term health of the country, but this idea that Keynesian economics can prevent the pain doesn't work with our political system. We spend in a recession, and we spend even more in an expansion because elections are always around the corner

Hey Julialg, do you call corporations "bankrupt" when they borrow to pay for investments? What if they borrow from themselves? Is the problem that you don't understand what an investment is or how investing works? Or is your attack on Americans using our resources to improve our lives just another part of your general anti-American campaign?

julialg must be another LICC alias.

What' investments' did the government make financeguy? Welfare payments to the states and unions are investments in your world.

A real Keynsian stimulus, of course, would not be the bank-bailout called the housing tax credit, but hiring Americans to teach in our schools, build our mass-transit system up to developed country standards, fix our failed medical care system, and generally restore our gutted government.

Combined with some serious regulation of the rentier/crony capitalism class and some electoral reform to break their stranglehold on the country, re-empowerment of ordinary employees in order to end the upper class skim, and other measures designed to reverse the Reagonomics destruction of the middle class.

Keynes's key insight, and not his alone, was that a modern capitalist economy depends on a big enough middle class to buy the products it creates. Our 30 year campaign to redistribute income upwards is slowly killing the basis of our prosperity.

Another comedy of the Keynsian stimulus approach.

Consider the sick athlete who complaints to his doctor that he can't consume his 10,000 calorie diet, so instead of prescribing bed rest, they force feed him.

The brilliance of Keynes was that he died so quicky after WWII. Had he lived longer he would not have been canonized. We'd be far better off listening to Hayek

steve actually still thinks this Keynesian stimulus nonsense works?!? Hilarious. Keynesianism failed in the 1930s, failed in the 1970s, failed in 1990s Japan, failed now. But in steve's bizarro world, failure=success.

The only way to improve the economy(and the life of the poor/middle class) is to drastically cut government. Have a flat tax of 20% with no deductions and get the government the hell out of the way. Start the flat tax at income $60000+ so the poor/middle class are exempt. Make unions illegal in the public sector. The conflict of interest is mind blowing. And stop the entitlement society with no personal responsibility.

The government makes things worse by preventing housing prices from dropping to where they need to stimulate housing demand. They make it even worse by not forcing banks to recognize their losses which effectively makes zombie banks who cannot lend(we still have a huge solvency issue in the banking system) and zero interest rates, hurts the economy again by making a significant percentage of the country feel poorer(income effect).

Lastly Obama has to stop bashing industry. Stopping oil exploration in the gulf cost us even more jobs, Private business creates jobs, not the government. Engaging in populism is not a strategy that wil get us anywhere.

In LICC's bizarro world, what "failed in the 1930s, failed in the 1970s, failed in 1990s Japan, failed now" is "Keynesianism," when, in fact, it was Austrianism.

"Obama has to stop bashing industry"

OMG. Where's the Tea-Party Kook-Aid?

IBM, Emerson, etc all are increasing their international presence and not their u.s. business. If we want the economy to grow we need to support free trade agreements and lower barriers. We'll never have the factories we did fifty years ago, but at least we'll design and market and sell the products and get some of the value added returns.

Now steve thinks that massive government deficit spending is "Austrianism". I think he just makes things up just to argue.

Why argue about statistics when there are hard-wired political theories to adhere to?

"Deficits don't matter."

- Dick Cheney.

Dick Cheney <> Keynes

Deficits don't matter until they matter. Just ask Greece,Porgual and Spain.

Bush was moderate left and the regime's leader is hard left. Look at the deficits and economy after 12 years of governing left economically. Let's try without the welfare and entitlement state. ( Milton friedman's model )

Kate Bush?

Only you could come up with something that utterly stupid and ridiculous julia. Congrats again.

"Let's try without the welfare and entitlement state."

Exactly. Let's go back to the 19th century.

Oh, wait! It was a time of booms and busts, and VERY cheap labor:

http://history1800s.about.com/od/thegildedage/a/financialpanics.htm

malhtus... You can't be that naive, can you?. Bush and kennedy, yes that ultra left wing kennedy, helped bankrupted the country with that prescribtion drug benefit bill. Remember that? And bush's deficit spending fits right in there with pelosi.

"Deficits don't matter until they matter."

You should have told that to Meister Bush.

"about 3 hours ago
ignore this person
report abuse The CBO simply said given these models and these assumptions this is the answer. Whether one says 4.5 or 1.7% or -5% depends on the assumptions one throws into the model. For a glimpse at the process just replay the debate on health care savings and what the CBO actually certified. They are given the assumptiosn. It's all political b.s.
"

If we assume that the stimulus boosted GNP by 5%, we can safely conclude that it boosted GNP by 5%!

http://www.nationalreview.com/battle10/244695/bennet-bombshell-trillions-debt-nothing-show-it-michael-sandoval

Even the non-brain dead democrat senators know!!!

It's was a stupid and politically motivated argument to make saying that we're ahead by 4.5% based on the spending. First off no controlled experiment is possible, and the boast was made because they can't say the economy is doing well, so they just say we're better than we would have been if we did nothing, and nobody can refute that either because you can't prove it. Fortunatley Obama knows that the CBO model devised by larry summers is infallable.

malthus ---Only you could come up with something that utterly stupid and ridiculous julia. Congrats again.

Stunning isn't it malthus? Just as intelligent as Billy Graham's son announcing that there is no question that Obama is muslim because his father was muslim and the seed of islam is passed by the father just as the seed of judaism is passed through the mother.

The number one problem in this country is the poor quality of our education system. Ignorance is a national disease. As sometimes evidenced on otherwise intelligent blog sites.

Tisk, tisk, tisk, Riversider: you believe the CBO - universally considered impartially - when it suits your silly economic theories, but not when it doesn't. You Tea-Bagger "I want everything for nothing," "Kill socialized medicine but don't touch my Medicaid," "The government is the problem unless it's the army, the police, the jails, and any other project that I like" "Stay out of my life by save Terri Schiavo" bunch really do make me laugh.

universally considered impartially = universally considered impartial

Ooops!

apt23 bush is a country club republican very very moderate... His economic policies were very democratic like. We know you all hate to admit it, but bush economically was left of clinton.

the cbo is impartial, but they dont' set the ground rules. so they can be made to be a tool by whatever party is in power.

"so they can be made to be a tool by whatever party is in power."

You mean they were tools for Bush?

http://www.youtube.com/watch?v=D_itVyZKmrM&feature=player_embedded