4) An initial CBO analysis found that a mere $26 billion out of $274 billion in infrastructure spending, just 7 percent, would be delivered into the economy by next fall. An update determined that just 64 percent of the stimulus would reach the economy by 2011. 6) Christina Romer, the new head of the Council of Economic Advisers, coauthored a paper in which the following was written about taxes: "Tax increases appear to have a very large, sustained, and highly significant negative impact on output. Since most of our exogenous tax changes are in fact reductions, the more intuitive way to express this result is that tax cuts have very large and persistent positive output effects." And former Bush economic adviser Lawrence Lindsey tack on this addendum: "The macroeconomic benefits of tax cuts can be two to three times larger than common estimates of the benefits related to spending increases. The relative advantage of tax cuts over spending is even clearer when the recession is centered on the household balance sheet." 7) Economists Susan Woodward and Robert Hall find that the multiplier effect from infrastructure spending maybe just 1-for-1, less than that 3-to-1 ratio for tax cuts that Romer found: "We believe that the one-for-one rule derived from wartime increases in military spending would also apply to increases in infrastructure spending in a stimulus package. We should not count on any inducement of higher consumption from the infrastructure stimulus." 9) Massive stimulus didn't work in the Great Depression. As this Heritage Foundation study notes: "After the stock market collapse in 1929, the Hoover Administration increased federal spending by 47 percent over the following three years. As a result, federal spending increased from 3.4 percent of GDP in 1930 to 6.9 percent in 1932 and reached 9.8 percent by 1940. That same year-- 10 years into the Great Depression--America's unemployment rate stood at 14.6 percent." Same goes for Japan and its Great Stagnation of the 1990s. http://www.usnews.com/blogs/capital-commerce/2009/01/27/10-reasons-to-nix-the-stimulus-plan.html
For the most part, you guys are still stuck in left versus right land and it just gets worse and worse. Obama is president, and has inherited a nightmare. Not just because of Mr. Bush, but because of a myriad of blunder on both sides of the aisle. 700 billion for financial bailouts, but nothing for auto makers? I'm not sure either shoud get bailout money, but please try to keep it real, from both sides. Pay for the rebuilding of Iraq, but not for rebuilding America.? I don't know, but as a high level taxpayer, I would prefer to fix things at home. c
I saw nothing partisan above, it is you stuck in left versus right. If we question spending on ACORN, that's taking a partisan view? It's highly annoying that when republicans talk about tax cuts, they are greedy, etc. but when Demos do it's suddenly good policy. If you question the timing and type of spending, you are an unpatriotic partisan. If you question the real effectiveness of gov't spending, you are 'blocking progress'? Please try and understand your own biases.