I break the stimulus into three parts: the tax cuts and transfer increases, the aid to state and local governments, and the traditional spending programs. Here I'm talking about only the third part. (If you are wondering, I regard the first part as mostly ineffective and the second part as mostly effective.)
Of the workers employed by this third part of the Obama stimulus, what percentage of them already had jobs? What percentage moved from unemployed to employed? More hypothetically, what percentage had jobs but would have lost them, thus effectively counting as a move from "unemployed" to "employed" status?
I'm not talking about the maybe-hard-to-estimate effects from boosting aggregate demand, I'm talking about the "mere counting" aspect of the problem. "We hired him, he didn't have a job before. Now he has a job." What percentage of the hired people fall into that category?
I've read plenty on these studies, but they don't seem "net" to me.
Does anyone know where this information is available?
Tyler, I hope this is useful:
http://washingtontimes.com/news/2010/feb/02/burgeoning-federal-payroll-signals-return-of-big-g//print/
“I break the stimulus into three parts…”
Surely there’s a fourth part: tax hikes foregone. The Bush tax cuts should have been rescinded immediately but weren’t, because “you don’t raise taxes in a depression.” That’s stimulus.
This site seems to be headed in your direction – http://stimuluswatch.org/2.0/
My money was stolen by a gang of thieves, did the gang spend it on prostitutes, predator drones, drugs or by paying off people to watch their back?
Which is most stimulative? How can we be sure the gang of thieves is counting up the jobs gained do to this stimulus properly?
I propose we reguire the gang of thieves to more accurately keep track of the jobs created so we can analyze the stimulus more scientificly. You see I like science and if we use math to look at this data it will be scientific and nobody could be oppposed to science right?
I think you’re asking a counterfactual question: if the third-category government programs (“stimulus” that was direct, not through state and local governments, but not tax cuts or simple transfer payments), and the governmental borrowing necessary to finance them, had not taken place, how much (and in what direction) would employment have been affected? Such a question cannot be answered by “measurement”; it can only be answered by heavy reliance on some economic theory, which, unfortunately, will be epistemically shaky.
I think you have to give Obama props for trying to be more transparent in terms of the effects of the recovery act. But we as a nation are low on the learning curve for how to track it. Two things we do know: there will be more stimulus acts, if not in the next 6 months, at least in the next 12 years (if I recall, GW had 2); and using the Internet to get reports is only going to expand.
Why can’t economists take a look at recovery.gov and the private efforts, like stimuluswatch.org, and come up with a set of data they agree would be most useful. Then run them by panel of the people who actually have to do the calculations and make the reports. Then have the reporting system changed and on the shelf the next time a stimulus act is needed.
When you say the first part of the ARRA (tax credits, extensions to unemployment insurance, COBRA support, etc.) was “mostly ineffective”, that kind of depends on what its purpose was, doesn’t it? It seems to me that the primary purpose of this part of the bill was to make the effects of the recession less bad for the unemployed and underemployed, not to stimulate the economy. Based on my conversations with a number of friends who lost their jobs at the end of 2008 but have not had to resort to bankruptcy, I believe it was quite successful at accomplishing that purpose. The mistake here is calling the ARRA a “stimulus package” when only part of it was actually intended as stimulus.
This only works if you want to rescind the Bush tax cuts for the poor and middle class, too, the ones that Obama wants to extend permanently. Is that what you mean?
The ARRA was nominally $787 billion, which includes the annual AMT patch at $70B. Some wouldn’t count that latter, believing that since the AMT is always patched, not patching it would be a tax hike.
Are you claiming that all the Bush tax cuts should have been rescinded, not just the taxes on the rich that Obama wants to rescind? If you look at the Budget (pg. 147), you’ll see that the income in one year for raising the top rates back is only $34 B in 2011.
To get up to the $200B number that you’re claiming, you would have to raise the 10% bracket back to 15%, raise the 25% bracket, etc., etc. All the things that Obama promised not to do.
You’re arguing from the same perspective as the withdrawn Reuters story.
“This only works if you want to rescind the Bush tax cuts for the poor and middle class, too, the ones that Obama wants to extend permanently. Is that what you mean?”
No problem with replacing tax cuts for the poor with tax cuts on the wealthier… That, however, is not the point I’m trying to make. Those tax cuts are *not* being rescinded, or kept but replaced with other taxes which make up the difference, because “you don’t raise taxes in a depression.” That makes those tax cuts stimulus.
“To get up to the $200B number that you’re claiming…”
Sorry, I don’t think I made any claim using this number.
Sorry if I was unclear.
You said that the stimulus for this year was over a trillion. I assumed from what you wrote that you got that by taking the money for ARRA, $787 billion, and then added in the money from not rescinding the Bush tax cuts. Well over $1T – $787B is over $200B, right?
So it seems to me like you did make a claim using this number, or else there’s yet another form of stimulus for this year that you’re talking about besides ARRA and the tax cuts being extended. Perhaps you’re including TARP, which wasn’t mentioned in the original post or by Tyler?
But most of the money from the Bush tax cuts went to the poor and middle class, and are part of the taxes Obama said he wanted to extend. As I said, if you look at the budget, the one year value for rescinding the taxes on the rich is ~$35B, not ~$200B.
I’m sorry but I can’t tell from your answer if you think that the Bush tax cuts for the poor and middle class also ought to be rescinded.
“No problem with replacing tax cuts for the poor with tax cuts on the wealthier…”
Sorry, that should be “No problem with replacing tax cuts for the poor with additional taxes on the wealthier…”
Ah, so when you say that “the Bush tax cuts should be rescinded,” you mean that “most of the Bush tax cuts should be extended, but additional taxes on the wealthy should be levied to raise the foregone revenue from the tax cuts on the poor and middle class?”
Does anyone find it odd that an economics professor and economics text author doesn’t know how to empirically answer the question that has been debated for at least half a century.
I also find it odd that in the 80s, renaming Keynesian deficit spending stimulus “supply side Reaganomics” seemed like a great way to resolve the number of jobs created by government deficit spending.
Why didn’t anyone ask the questions being asked today back in 1983? After all, Reagan announced the number of jobs that would be created by his signing of a spending bill:
Remarks on Signing the Surface Transportation Assistance Act of 1982
January 6, 1983
Today, as this bill becomes law, America ends a period of decline in her vast and world-famous transportation system. Because of the prompt and bipartisan action of Congress, we can now ensure for our children a special part of their heritage — a network of highways and mass transit that has enabled our commerce to thrive, our country to grow, and our people to roam freely and easily to every corner of our land.
:
The money for today’s improvements will come from increasing the gas tax, or the highway user fee, by the equivalent of a nickel a gallon — about $30 a year for most motorists.
The repairs and construction are expected to stimulate about 170,000 jobs, with an additional 150,000 jobs created in related industries. Another provision in this bill adds up to 6 weeks of unemployment benefits for people who have used up all their unemployment insurance. Such badly needed assistance will put more than half a billion dollars into the pockets of family budgets of our long-term unemployed.
While the action we take today will bring some relief to those of us who so want to work and yet cannot find jobs, its principal benefit will be to ensure that our roads and transit systems are safe, efficient, and in good repair. The state of our transportation system affects our commerce, our economy, and our future.
That’s why I’m pleased today to sign House resolution 6211, the Surface Transportation Assistance Act for 1982. It will help America enter a brighter and a more prosperous decade ahead. And so saying, and before the bridges fall down, I’ll get this bill signed. [Laughter]
Did Reagan signing the bill really create 320,000 jobs?
If it wasn’t possible to answer the question then, why weren’t economic metrics developed and the data collected for future government deficit spending to measure the impact on jobs?
I mean: the hole of 700+ billion in lost revenue caused by the Bush tax cuts should be rescinded by increasing taxes 700+ billion. Or at least, if we don’t do this, we count this 700+ as stimulus, because that is what it is.
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