The Obama stimulus seems to have done much better than almost anyone expected. We'll see how the liberal media bias covers this.The CBO On The Stimulus
26 May 2010 11:59 am
There will be long term costs to it - on interest on the debt - but the Obama stimulus seems to have done much better than almost anyone expected:
CBO estimates that in the first quarter of calendar year 2010, ARRA’s policies:
- Raised the level of real (inflation-adjusted) gross domestic product (GDP) by between 1.7 percent and 4.2 percent,
- Lowered the unemployment rate by between 0.7 percentage points and 1.5 percentage points,
- Increased the number of people employed by between 1.2 million and 2.8 million, and
- Increased the number of full-time-equivalent (FTE) jobs by 1.8 million to 4.1 million compared with what those amounts would have been otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers.)
The effects of ARRA on output and employment are expected to increase further during calendar year 2010 but then diminish in 2011 and fade away by the end of 2012.
Wednesday, May 26, 2010
The CBO On The Stimulus: Better Than Expected
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Do you realize that the CBO’s calculations are not based on actually observing the economy’s recent performance? Did you know that the CBO instead uses an economic model programmed to assume that stimulus spending automatically creates jobs, thus guaranteeing their result? In other words, because the CBO decided to assume that every dollar of government spending increased GDP, its conclusion that the stimulus saved jobs was pre-ordained!
But don’t take my word for it. Buried at the end of the same CBO report you cite is the following passage, where CBO basically admits that its new “research” simply plugged new spending numbers into its Keynesian formula. This sounds absurd, and it is, but don’t forget that these are the same geniuses that predicted that a giant new health care entitlement would reduce long-run budget deficits.
"CBO’s current estimates of the impact of ARRA on output and employment differ slightly from those presented in its February 2010 report primarily because the agency has revised its estimates of ARRA’s impact on federal spending on the basis of new information. Outlays resulting from ARRA in the first quarter of calendar year 2010 were higher than the amount that CBO projected in February 2010 in preparing its estimate of the law’s likely impact on output and employment, primarily because a larger-than-expected amount of refundable tax credits was disbursed in the first quarter rather than later in the year. That change makes the estimated impact of ARRA on output and employment in the first quarter slightly higher than what CBO projected in February."
In other words, because more tax credits were disbursed CBO raised its estimated impact on output and employment.
Here's a thought expirement for you: before you make your next post, do some research and see what the opposing view is, then decide which side has the better argument. Try it sometime! You might like it.
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