tag:blogger.com,1999:blog-6616959642391988608.post5007431857818934548..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: Dissecting the faux-stimulus fiascoScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger10125tag:blogger.com,1999:blog-6616959642391988608.post-1215896713589658612009-02-10T11:20:00.000-08:002009-02-10T11:20:00.000-08:00Jon S.First, my interpretation of the Romers' pape...Jon S.<BR/>First, my interpretation of the Romers' paper is entirely consistent with the New Keynesian school of thought (of which the Romers are, and I suppose I am increasingly, a part). It was the only interpretation that I was even aware of until Greg Mankiw wrote a Wall Street Journal article last month which presented an entirely different interpretation. That article is now generally Mark A. Sadowskihttps://www.blogger.com/profile/13147923641894915172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-6042493697728247082009-02-10T04:39:00.000-08:002009-02-10T04:39:00.000-08:00Well, you sure showed me, Mark. You can dress it ...Well, you sure showed me, Mark. You can dress it up any way you want to but her conclusions are not at all what you say they are, and you can elide all you want but you've simply cut and pasted the White House talking points, which are nonsensical at best. Romer's research paper in 2007 and the one with hubby in Nov. 2008 both indicate that tax cuts do far more for GDP than fiscal spending. Jon S.https://www.blogger.com/profile/14840074248344452572noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-58188697256618624332009-02-09T13:08:00.000-08:002009-02-09T13:08:00.000-08:00Jon S.,I suspect the White House is getting its ec...Jon S.,<BR/>I suspect the White House is getting its economic talking points these days from economists like Christina Romer, so it's getting things just a little bit backwards. It's refreshing to have a White House that pays attention to New Keynesian economists for a change. <BR/><BR/>I have in fact read, and reread, the paper in its different versions (it's still a working paper of course). Mark A. Sadowskihttps://www.blogger.com/profile/13147923641894915172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-64830754788611199502009-02-09T09:37:00.000-08:002009-02-09T09:37:00.000-08:00Mark -- unpacking all your DNC and now White House...Mark -- unpacking all your DNC and now White House talking points is quite a chore.<BR/><BR/>I'm amazed that you have the gumption to say, re Christy Romer's 2007 paper, that "the most reasonable interpretation of her paper is that all types of fiscal stimulus are more potent than conventional estimates would lead us to believe." That is manifestly NOT a reasonable interpretation of her paper; Jon S.https://www.blogger.com/profile/14840074248344452572noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-74324996296547683442009-02-08T22:18:00.000-08:002009-02-08T22:18:00.000-08:00Therapist: I don't share your optimism about the m...Therapist: I don't share your optimism about the market's ability to shrug off the negative implications of the stimulus bill. I think the prospect of just such a bill has been plaguing the market since early September. This bill squanders huge amounts of money, and permanently increases the size of government. That, in turn, means that tax burdens have to rise significantly in the future. FollowScott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-48204368637280828362009-02-08T18:14:00.000-08:002009-02-08T18:14:00.000-08:00Scott,Maybe it's all about perception and it doesn...Scott,<BR/>Maybe it's all about perception and it doesn't really matter about the details of how the money gets spent; maybe it's just about building some form of confidence in the system, getting the wheels to churn, and at some point, after equilibrium is established they can re-set some of this nonsense.The Therapist Is Inhttps://www.blogger.com/profile/07340602598063284934noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-56873956966434855682009-02-08T17:49:00.000-08:002009-02-08T17:49:00.000-08:00Scott,Mark is completely missing the point the tru...Scott,<BR/><BR/>Mark is completely missing the point the truth is that this whole Stimulus debate has been argued from the demand side, " we've got to get money into the hands of consumers" is the rallying cry.<BR/><BR/>The President and his party have defined stimulus down to the point where he insisted the other day that spending was stimulus! this is the Bond illusion portion of their magic davehttps://www.blogger.com/profile/01173750820649272172noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-59420463528149739532009-02-08T16:35:00.000-08:002009-02-08T16:35:00.000-08:00Actually there are $182 billion in tax cuts in the...Actually there are $182 billion in tax cuts in the house bill as classified by the CBO according to their latest analysis:<BR/><BR/>http://www.cbo.gov/ftpdocs/99xx/doc9976/hr1aspassed.pdf<BR/><BR/>The CBO classifies Make Work Pay as spending. The CBO does however classify the bonus depreciation, the net operating loss carryback and the Work Opportunity Credit as tax cuts however. It is immaterialMark A. Sadowskihttps://www.blogger.com/profile/14990898222583476736noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-6825238504243668922009-02-08T14:50:00.000-08:002009-02-08T14:50:00.000-08:00Mark: There are no tax cuts, at least to my knowle...Mark: There are no tax cuts, at least to my knowledge. What they call tax cuts are actually tax rebates, meaning that people who don't pay taxes will receive checks. That is the absolute wrong way to use "tax cuts." As I and others have explained, if you take money from those who do pay taxes and give it to those who don't you are creating negative incentives to work. Very bad.<BR/><BR/>Since as Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-12151292275701182632009-02-08T13:54:00.000-08:002009-02-08T13:54:00.000-08:00Scott,Thanks for the heads up about the article. s...Scott,<BR/>Thanks for the heads up about the article. somehow I missed it.<BR/><BR/>Actually 17% of the spending is spent the first fiscal year and 37% the second. On the other hand 34% of the tax cuts go out the first year and 66% the second. Overall 21% of the impact goes out the first year and 44% the second.<BR/><BR/>The whole problem with designing the stimulus bill was that spending has a Mark A. Sadowskihttps://www.blogger.com/profile/14990898222583476736noreply@blogger.com