NY Times on Stimulus Bill

[lindajdunn]

http://www.nytimes.com/2010/02/17/bu...leonhardt.html

Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

The reasons for the stimulus’s middling popularity aren’t a mystery. The unemployment rate remains near 10 percent, and many families are struggling. Saying that things could have been even worse doesn’t exactly inspire. Liberals don’t like the stimulus because they wish it were bigger. Republicans don’t like it because it’s a Democratic program. The Obama administration hurt the bill’s popularity by making too rosy an economic forecast upon taking office.

[Hauptman]

http://www.nytimes.com/2010/02/17/bu...leonhardt.html

I'm curious as to how the stimulus could have possibly hurt the economy? Granted that in the long-run the added debt could be a problem, but at this point in time how could it have hurt?

That leads to the next point of how could it have not helped? You could say that it didn't help enough to be worth it, but how could injecting $1 trillion into the economy not have helped at all in the short run?

[Inquartata]

Crowding out aside, because most of the stimulus money hasn't been spent yet. But it's in the pipeline. And now that the economy appears to be starting to recover, all that spending is going to hit at precisely the wrong time in the business cycle?

IOW, just the sort of thing that discredited neo-Keynesian fiscal policy the first time around?

[Hauptman]

Crowding out aside, because most of the stimulus money hasn't been spent yet. But it's in the pipeline. And now that the economy appears to be starting to recover, all that spending is going to hit at precisely the wrong time in the business cycle?

IOW, just the sort of thing that discredited neo-Keynesian fiscal policy the first time around?

Is the business cycle really that short? And are you advocating that the Fed raise interest rates so that more money doesn't get pumped in at this wrong time?

[melensdad]

Is the business cycle really that short?

Depends on the business but frankly YES it is short and getting shorter. Dress designs shown in Paris today can be copied in China within a matter of days and shipped to stores within a month or two. Multi-axis computerized milling machines can produce parts in less time that a machinist can do with a lathe or milling machine. Software can be pirated and transmitted around the world in a matter of hours, the same is true with movies and music.

Pick an industry and you will see that business cycles are indeed shrinking.

[Hauptman]

Depends on the business but frankly YES it is short and getting shorter. Dress designs shown in Paris today can be copied in China within a matter of days and shipped to stores within a month or two. Multi-axis computerized milling machines can produce parts in less time that a machinist can do with a lathe or milling machine. Software can be pirated and transmitted around the world in a matter of hours, the same is true with movies and music.

Pick an industry and you will see that business cycles are indeed shrinking.

Not quite the business cycles we're referring to. The current economic mess was years in the making, and it certainly won't recover in a year regardless of what we do.

I just love how the Obama stimulus package couldn't possibly be having an impact because it's too soon, but it's not too soon for Obama to take the blame for ruining the economy.

Thanks for clarifying that.

[Inquartata]

Is the business cycle really that short?

There are many cycles, some longer than others. What most economists mean by "the business cycle", though, is the pattern of recessions and growth periods which we experience in modern economies. This is indeed pretty short on average, usually no more than a few years...

See http://www.nber.org/cycles.html

And are you advocating that the Fed raise interest rates so that more money doesn't get pumped in at this wrong time?

Not necessarily, but someone had better do something. Shutting the spigot on the stimulus/jobs/pork spending coming out of Washington right now would be a good start...except that it's probably not possible, since much of the money is already in the hands of the bureaucracies and WILL be disbursed. jalea acta, I am afraid.

Not quite the business cycles we're referring to. The current economic mess was years in the making, and it certainly won't recover in a year regardless of what we do.

Neither of you is talking about the business cycle. Melensdad appears to be describing the product cycle, and I think you're describing a sort of layman's view of economic cycles...

Here's a decent discussion of them:

http://www.econlib.org/library/Enc/BusinessCycles.html

I just love how the Obama stimulus package couldn't possibly be having an impact because it's too soon, but it's not too soon for Obama to take the blame for ruining the economy.

You lost me there. Although I'm sure it's hilarious to liberals, whatever it means.

[jeff]

I thought that was perfectly obvious: Obama's opponents claim its too soon for any Obama program to have shown a benefit out of one side of their mouths, while out of the other side of their mouths they say he's been in office long enough to be blamed for the economic situation he *cough* inherited.

Good corrections on "business cycle" which is completely different from "product introduction time-to-market"

[Inquartata]

I thought that was perfectly obvious: Obama's opponents claim its too soon for any Obama program to have shown a benefit out of one side of their mouths, while out of the other side of their mouths they say he's been in office long enough to be blamed for the economic situation he *cough* inherited.

OK. Which people are these, exactly?

[jeff]

It's a long list. Listen to the rhetoric from the Republicans, Fox, and their proponents on this board. This isn't a treasure hunt.

[Inquartata]

I don't recall hearing that particular harangue before, is all.