Where The Money Went (stimulus) - Krugman

[Derechos]

Look at the peak quarter of stimulus (pdf - http://www.bea.gov/recovery/pdf/arra_table_01b.pdf), which was the first quarter of 2010. I’m going to rearrange the categories a bit. Here’s how I read it: at annual rates (in other words, actual numbers in the quarter were only 1/4 as large), the total budget impact was $357 billion. Of that, we had:

Tax cuts and refundable tax credits: $151 billion
Aid to individuals (mainly unemployment insurance and food stamps): $70 billion
Aid to state and local governments: $103 billion
Everything else: $33 billion

Note that the aid to individuals was basically safety net, and the aid to state and local was about mitigating spending cuts rather than spending expansion. Basically, this was at best an attempt to beef up automatic stabilizers.

So much for “we tried Keynesian policies and they didn’t work.”

http://krugman.blogs.nytimes.com/2011/07/10/where-the-money-went/

[IndianaJoe]

1. Yeah, now we'll spend no money and see how that works. n/t

[girl gone mad]

2. The geniuses on the right and in the "center"..

honestly believe (or pretend to believe) that once the government gets out of the way, money will start falling from the clouds.

[The Big Vetolski]

3. I thought government created the money. Silly me. nt

[girl gone mad]

7. Yep.

Where would they get the money to pay their taxes if the government didn't create it in the first place?

They want to make it a zero sum game and twist the screws even harder into labor, retirees and savers.

[mmonk]

4. Thanks for this. I plan to use it in my new piece coming soon.

This shows the joke the Republicans have regarding their claim of failure of Keynesianism along with their allies, the Libertarians and the New Democrats.

[socialist_n_TN]

5. When you have a stimulus that was a third

tax cuts of one sort or another, it ain't Keynesian.

[dkf]

6. How much of that is stimulus dollars that couldn't be spent fast enough

Because there are no such things as shovel ready projects?

Maybe our system is too cumbersome to do the best types of stimulus.

[RKP5637]

9. IMO our system is broken and obsolete, and needs to be retooled for the

21st century. Of course, none on the gravy train are going to do that and unfortunately money = power = bribing = running the country. It will take a major crisis wherein the really monied are losing lots of cash before anything might get changed. I think similar, "Maybe our system is too cumbersome to do the best types of stimulus."

[mmonk]

11. The part that went to the states was to replace the Freidman

economics of budgets cuts during a recession. Therefore, it wasn't Keynesian in that it did not add spending in the states.

[WillyT]

8. K & R !!!

:kick:

[RKP5637]

10. K&R !!! n/t