Hayek v Keynes

For those eager to put some math to the rhetoric coming from the White House over the president's jobs creation plan, and that should be everyone, here is a quick and dirty estimate based on the numbers being thrown around of a 2% GDP increase in year 1 and 1.9 million jobs created or saved... most saved, as in those you can't really quantify. Said otherwise, roughly a $300 billion increase in GDP yields 1.9 million jobs. So far so good. Now since the president is proposing to pay for the program over 10 years, let's assume the $475 billion in direct expenses is financed for 10 years at 2.5% which adds roughly $120 billion to the total cost of the program. In other words, as the calculations detailed and show below elaborate, the overall AJA plan will cost $250,000 per job created (excluding the interest expense) and $312,500 per union job, er job created (including interest). And that's how much it costs for Obama to purchase one vote... created or saved. Keynesian efficiency strikes like a Swiss watch yet again.

http://www.zerohedge.com/news/cost-obamas-stimulus-plan-312500-job-vote-created-or-saved-and-guess-who-paying-it

I'm still getting ready for the inflation carnage. Any day now right?

"Riversider
about 13 months ago
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Give it 12-18 months. Inflation is a very sneaky enemy."

In Compromise, Republicans Allow Obama to Create One Part-Time Job

http://www.borowitzreport.com/

Obama has a compromise. As long as he can keep his job he's happy. And as part of the compromise he'll admit this is not creating a new job, but saving an old one.

Unlike the movies, life rarely permits second takes. But the Second World War gave John Maynard Keynes, the patron saint of government activism, and Friedrich Hayek, the Cassandra who warned of the state’s destructive potential, just such opportunities.

By 1943, it was obvious to Keynes that the U.S. and Britain would design the postwar economic order together, but that America’s financial strength and Britain’s weakness meant that the U.S. would have the last word on all important matters. Determined to deploy his intellectual capital as a counterweight to American financial clout, he drafted the British proposal and got it out first.

Although just 40, Hayek too was feeling his age, and was troubled by deafness and a sense of uselessness. His emigre status had shut him out of any active role in Britain’s fight against fascism.

“The creation of artificial demand,” Hayek argued, would only lead to another burst of inflation and another downturn. Like most American economists -- as well as President Herbert Hoover and his political rival, Roosevelt -- Hayek opposed going off the gold standard, and favored spending cuts and tax increases to balance the budget. Give the economy time to heal.

http://www.bloomberg.com/news/2011-09-13/hayek-keynes-and-preventing-economic-crises-commentary-by-sylvia-nasar.html