[quote]phil_leotardo wrote:
100meters wrote:
Is the sort of logic you apply to any situation or just stimulus packages.
But short answer: we’re not doing the exact same thing.
We’re not doing the “exact same thing” but we are doing something similar to what the Japanese did.
Here is one article in the WSJ that details the similarities between the two:
As January 20 nears, Barack Obama’s ambitions for spending on the likes of roads, bridges and jobless benefits keep growing. The latest leak puts the “stimulus” at $1 trillion over a couple of years, and the political class is embracing it as a miracle cure.
Not to spoil the party, but this is not a new idea. Keynesian “pump-priming” in a recession has often been tried, and as an economic stimulus it is overrated. The money that the government spends has to come from somewhere, which means from the private economy in higher taxes or borrowing. The public works are usually less productive than the foregone private investment.
In the Age of Obama, we seem fated to re-explain these eternal lessons. So for today we thought we’d recount the history of the last major country that tried to spend its way to “stimulus” – Japan during its “lost decade” of the 1990s. In 1992, Japanese Prime Minister Kiichi Miyazawa faced falling property prices and a stock market that had sunk 60% in three years. Mr. Miyazawa’s Liberal Democratic Party won re-election promising that Japan would spend its way to becoming a “lifestyle superpower.” The country embarked on a great Keynesian experiment…
Now we’re told that a similar spending program – a new New Deal – will revive the U.S. economy. How do you say “good luck” in Japanese?
Here is another article about how the stimulus bill will hurt the economy in the long run:
President Barack Obama speaks to the House Democratic Issues Conference on Thursday in Williamsburg. Associated Press
President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.
CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.
CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.
The House last week passed a bill totaling about $820 billion while the Senate is working on a proposal reaching about $900 billion in spending increases and tax cuts.
But Republicans and some moderate Democrats have balked at the size of the bill and at some of the spending items included in it, arguing they won’t produce immediate jobs, which is the stated goal of the bill.
The budget office had previously estimated service the debt due to the new spending could add hundreds of millions of dollars to the cost of the bill – forcing the crowd-out.
CBOs basic assumption is that, in the long run, each dollar of additional debt crowds out about a third of a dollars worth of private domestic capital, CBO said in its letter.
CBO said there is no crowding out in the short term, so the plan would succeed in boosting growth in 2009 and 2010.
The agency projected the Senate bill would produce between 1.4 percent and 4.1 percent higher growth in 2009 than if there was no action. For 2010, the plan would boost growth by 1.2 percent to 3.6 percent.
CBO did project the bill would create jobs, though by 2011 the effects would be minuscule.
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Dinan, the editorial author you incredibly posted is a hack. He’s badly misrepresenting the CBO’s findings, which you could simply read yourself, but then you’d come back here supporting the stimulus right?
But for a laugh look how Dinan fooled you (yes I know you want to be fooled, but that’s another story)
The CBO (if you read the report!!!) says that the GDP will but up in 2010-11 by 1 to 3.6 percent!
But Dinan focused on a .1 to .3 drop. In 2019! And you posted this! What a hoot.