Sentences to ponder

This note shows that the aggregate fiscal expenditure stimulus in the United States, properly adjusted for the declining fiscal expenditure of the fifty states, was close to zero in 2009. While the Federal government stimulus prevented a net decline in aggregate fiscal expenditure, it did not stimulate the aggregate expenditure above its predicted mean.

That's from Joshua Aizanman and Gurnain Kaur Pasricha.  I don't currently see an ungated copy.


I live in a city that received a few million dollars to build a new transit center. At the same time, the city's budget is coming up a few million short, so they're looking at laying off dozens of city workers. I doubt those cops are going to be working on the railroad. The stimulus, from what I can see, seems poorly spent in many cases. It would have been better just to give the money to states and municipalities to fill their budget holes.

Ted- The stimulus had a lot of money for aid to state to prevent layoffs like those you mentioned.

the majority of funds earmarked for 09 was for state fiscal relief.

the rest was tax cuts, which i'm guessing isn't captured in this analysis.

the actual federal spending is more backended, the big flows will come in 2010 and 2011.

Krugman wrote "50 Little Hoovers" on this topic.

Nylund, there are many, many people who get the idea that cutting federal spending (and state spending) means layoffs of tax-funded workers. Indiana (yes, it's one of the 50 states) has lowered the number of state employees to levels last seen in the 1980s. This is a very good thing. We have a governor who cuts spending wherever he can and has moved public employees to a health saving account system that saves them and the state money.

Government jobs should be designed to create outstanding value to the public that funds them. To dump tax money into creating government jobs to push employment percentages up is idiotic and wasteful. Consumers are spooked by rapid changes in the economy brought on by government interventions. It looks chaotic and leads to uncertainty. Chaotic and wasteful job creation will not help. Paying thousands more government workers in Washington over $100k a year makes no one think they're getting better government from DC.

I'm not "upset" about cutting spending. I just consider much of the stimulus an increase in waste. If you're going to spend money, at least spend it in ways that have an immediate benefit. Much of the stimulus is in the backend, which is why truth in advertising would have been to call it "The Incumbent Re-election Act."

I'm glad see you're finally making some sense, Barkley :)


Only $53.6B went to stabilization, which is what I'm talking about. If you want to discuss facts, please actually do so, rather than coping a snide liberal attitude and accusing me of taking a strictly emotional stance.

For those seeking rebuttals to adoring comments regarding the state government budget in Indiana, and how Gov. Mitch Daniels and allies git 'er done, you might find native born Hoosier and current Indianapolis resident 'Doghouse Riley' a worthwhile read.

Post specifically discussing Gov. Daniels can be located there via the tag 'Midwestern States Governed By Surly Megalomaniacs With Napoleonic Complexes'. A reasonably representative (IMO) sample post is here.

Comments for this post are closed