Senate Finance Committee Reports Out The $300 Bonus Checks For Social Security Recipients
We do not yet know exactly what the Senate Appropriations Committee reported out today, but the Senate Finance Committee reported out a $300 bonus for each recipient of Social Security and Supplemental Security Income benefits.
House Democrats propose to spend $550 billion of their two-year, $825 billion "stimulus bill" (the rest of it being tax cuts). Most of the spending is unlikely to be timely or temporary. Strangely, most of it is targeted toward sectors of the economy where unemployment is the lowest.
After subtracting what House Democrats hope to spend on government payrolls, health, education and welfare, only a fifth of the original $550 billion is left for notoriously slow infrastructure projects, such as rebuilding highways and the electricity grid.
That's because "government spending shocks crowd out both residential and non-residential investment," while "the [positive] response of consumption is small and only significantly different from zero on impact" (i.e., temporarily). But suppose all of these recent studies were mistaken, and the House Democrats' spending spree worked as advertised. We're still left with three million jobs added or saved at a cost of $825 billion -- $275,000 per job.
In short, a growing body of evidence suggests that a dollar of extra spending is likely to lift nominal income by less than a dollar, arguably much less. Several studies suggest the multiplier may be less than zero after a couple of years, because private investment (including housing) eventually falls by more than government spending rises. Another $550 billion of deficit spending on top of a deficit already above $1 trillion is likely to prove more dangerous than helpful to an economy already overloaded with risky debt.
Good ole Wall Street Journal. The folks who supported--and probably still support--the Wall Street idiots who sabotaged the economy. Outstanding source for sound economic analysis (and that's sarcasm...just to be clear).
The problems can be traced back to people like Barney Frank pressuring banks to lend money to people to buy houses that they couldn't afford afford and I'm sure the WSJ wasn't call for loans to be made to people that couldn't pay them back.
One of the other causes was the Fed cutting interest rates and that clown Geithner was there when it was being done.
Obama has promised to oversee what he called a "substantial overhaul" of financial markets and U.S. regulatory structures.
But some observers question whether Geithner has the right stuff for that task. After all, he was one of the nation's top three regulators during a stretch in which the financial markets surged and then plunged, largely due to the fact that U.S. financial firms loaded up on unsuitable, risky investments -- and regulators did little to stop it.
And it will do about as much for the economy as the stimulus checks that were given out last year.
ReplyDeletehttp://online.wsj.com/article/SB123310498020322323.html#printMode
ReplyDeleteHouse Democrats propose to spend $550 billion of their two-year, $825 billion "stimulus bill" (the rest of it being tax cuts). Most of the spending is unlikely to be timely or temporary. Strangely, most of it is targeted toward sectors of the economy where unemployment is the lowest.
After subtracting what House Democrats hope to spend on government payrolls, health, education and welfare, only a fifth of the original $550 billion is left for notoriously slow infrastructure projects, such as rebuilding highways and the electricity grid.
That's because "government spending shocks crowd out both residential and non-residential investment," while "the [positive] response of consumption is small and only significantly different from zero on impact" (i.e., temporarily). But suppose all of these recent studies were mistaken, and the House Democrats' spending spree worked as advertised. We're still left with three million jobs added or saved at a cost of $825 billion -- $275,000 per job.
In short, a growing body of evidence suggests that a dollar of extra spending is likely to lift nominal income by less than a dollar, arguably much less. Several studies suggest the multiplier may be less than zero after a couple of years, because private investment (including housing) eventually falls by more than government spending rises. Another $550 billion of deficit spending on top of a deficit already above $1 trillion is likely to prove more dangerous than helpful to an economy already overloaded with risky debt.
Good ole Wall Street Journal. The folks who supported--and probably still support--the Wall Street idiots who sabotaged the economy. Outstanding source for sound economic analysis (and that's sarcasm...just to be clear).
ReplyDeleteThe problems can be traced back to people like Barney Frank pressuring banks to lend money to people to buy houses that they couldn't afford afford and I'm sure the WSJ wasn't call for loans to be made to people that couldn't pay them back.
ReplyDeleteOne of the other causes was the Fed cutting interest rates and that clown Geithner was there when it was being done.
http://money.cnn.com/2009/01/20/news/newsmakers/geithner.questions.fortune/index.htm
Obama has promised to oversee what he called a "substantial overhaul" of financial markets and U.S. regulatory structures.
But some observers question whether Geithner has the right stuff for that task. After all, he was one of the nation's top three regulators during a stretch in which the financial markets surged and then plunged, largely due to the fact that U.S. financial firms loaded up on unsuitable, risky investments -- and regulators did little to stop it.