Comments on: How to get bang from the stimulus buck

By: tegwar

tegwar — Sat, 15 Nov 2008 22:12:23 +0000

As hinted about by curmudgeon (should I capitalize that?), it's not just the modeler's bias but also a question of whether the past data fed into the model is reflective of the behavioral responses we'd see over the next year. To wit, all those tax ideas rely on the consumer spending propensities of various households. If the consumer is retrenching across the board, would more cash in the pocket be as used as in the past? Wildcard. (Also, the number of different tax variations run through reflects a certain paucity in our ability to think this last decade or 3). Although, maybe we want to give consumers cash which they plunk into lowering their debts...
Or, even more of an argument for the infrastructure / have the gov't spend the money directly approach. Especially if it moves us toward that ballyhooed green revolution which can propel us forward for the next few decades.

By: bryanfromhouston

bryanfromhouston — Wed, 12 Nov 2008 15:35:18 +0000

This is all fine and dandy, but what this country needs is a sustainable growth engine. So far, no policy has come forward with how to accomplish that task. Until we are able to provide jobs for those who want to work so that they can buy or rent homes and lease or purchase cars, there is no current plan I see that is going to work. We, I am afraid, are headed for a global depression-lite. I wish that it weren't so, but I just can't say it.

By: brj1212

brj1212 — Wed, 12 Nov 2008 15:04:48 +0000

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By: plukasiak

plukasiak — Wed, 12 Nov 2008 12:21:14 +0000

What is needed is a stimulus plan than ensures that the money spent on "stimulating" the economy actually does so. Tax breaks -- especially those aimed at corporations, capital gains, and the wealthy -- actually damage the economy because they simply raise the price of stocks, lowering P/E ratios, and increasing stockholder demands for layoffs in order to maintain/improve the profit picture of their investment. Giving money to those "most in need" is better than giving it to the rich, but (as noted above) a very large chunk of the money gets spent on the imported goods that less-well-off americans can afford.

If you want to stimulate the us economy, give middle class and poorer americans a $1000 debit card that expires in a relatively short period of time, and which can only be used to purchase American made goods.

By: curmudgeon57

curmudgeon57 — Wed, 12 Nov 2008 00:45:26 +0000

The problem is that this is the result of a model that includes the modeler's biases. At least Zandi is honest about those biases. I'm just not sure that those biases reflect reality.

By: That Anonymous Dude

That Anonymous Dude — Tue, 11 Nov 2008 22:19:53 +0000

how do I apply for food stamps?

"Make Bush income tax cuts permanent: $0.31"

looks like someone cut and paste his (slightly old) approval numbers in there.

By: pneogy

pneogy — Tue, 11 Nov 2008 22:03:48 +0000

Paul Krugman's NYT blog today suggests that the fiscal stimulus to be effective needs to be about $600 Billion. Between Krugman and Moody's we now have a handle on how much to spend, and what to spend it on!