The proof about Keynes at long last

[cbirch2]

Well it depends if you talking about fiscal multipliers or keynesian multipliers that only measure aggregate demand.

Both depend on the concept that each dollar of stimulus is immediately spent and that the recipient of that dollar turns around and spends it again. Even Keynes acknowledged that this isn't true and sought to tax savings in order to promote spending. BUT Friedman proved that even such a measure is fruitless.

I said that a 1.44 multiplier is an utter failure. Now some might say, "44%" ROI is good. Except that ad Friedman showed, the reality of deficit stimulus is that (in 1968 dollars) 1.68 is used to repay every dollar borrowed, due to the attrition of cash through federal bureaucracy. So the 1.44 is in fact a negative multiplier, contracting the economy by $.24 for each dollar of stimulus. The net effect of the Obama stimulus is to retard the economy. A bounce followed by a crash is the inevitable result of deficit stimulus.

As we tumble into the second dip of our double dip recession, there can be no denying that the stimulus failed, what I point out is that it could do nothing other than fail.

Sorry but once you started quoting milton friedman i stopped listening. You mean the person whos predictions about monetary policy were proved absolutely wrong during the last 3 years? ie, liquidity traps are possible.

 

[Uncensored2008]

Well first lets start off with the fact that it was 40% tax cuts as an explanation as to why it wasnt successful.

Why do you think consumers are less inclined to spend tax cuts than other types of windfall income?

I keep hearing this, but the rational behind it is lacking.

The reality behind why we saw little uptick in consumer spending is that the cash infusion was consumed in debt service. Consumers used the tax break to pay down credit cards. Business used them to pay down lines of credit.

Then lets expand on that and point out that it was $750 legislation aimed to combat what is now estimated to be a $6.8 trillion recession. You do the math.

Come on, that isn't relevant. No one (rational) argues that the stimulus was intended to offset loss of GDP. Keynes didn't claim stimulus would or could, nor did Obama.

Your statement that there is no multiplier is based on what?? you claim there isnt one to one correlation, which is just shit you pull out of your ass, but that assumption would have to be based on how much the stimulus lessened the decrease in GDP before it was able to increase GDP.

Your graph demonstrates that the moment the stimulus stopped flowing, all effect on the economy halted. The business cycle was not altered, recovery did not follow. Obama merely purchased a momentary respite with the borrowed monies.

That isnt something you can gauge, so your assertion is pulled from no where.

I am simply pointing out that the graph you used shows that the stimulus failed.

 

[cbirch2]

Well first lets start off with the fact that it was 40% tax cuts as an explanation as to why it wasnt successful.

Why do you think consumers are less inclined to spend tax cuts than other types of windfall income?

I keep hearing this, but the rational behind it is lacking.

The reality behind why we saw little uptick in consumer spending is that the cash infusion was consumed in debt service. Consumers used the tax break to pay down credit cards. Business used them to pay down lines of credit.

no. the rational behind it is that people will save a portion of their tax cut just like they do with the rest of their wages. Thats why the multiplier is less than 1.

Then lets expand on that and point out that it was $750 legislation aimed to combat what is now estimated to be a $6.8 trillion recession. You do the math.

Come on, that isn't relevant. No one (rational) argues that the stimulus was intended to offset loss of GDP. Keynes didn't claim stimulus would or could, nor did Obama.

How is that not relevant? The bill was 10% the scale of the problem. Conservatives laugh when liberals claim the bill wasnt large enough but its a mathematically verifiable fact. GDP decreased by 5% in Q1 2009 alone. $700 billion is about 5% of GDP. At most it would offset one quarter of losses.

Your statement that there is no multiplier is based on what?? you claim there isnt one to one correlation, which is just shit you pull out of your ass, but that assumption would have to be based on how much the stimulus lessened the decrease in GDP before it was able to increase GDP.

Your graph demonstrates that the moment the stimulus stopped flowing, all effect on the economy halted. The business cycle was not altered, recovery did not follow. Obama merely purchased a momentary respite with the borrowed monies.

What!? Prior to the stimulus the economy was losing 800,000 jobs. After the money ran out in june the economy has still been adding 100,000 jobs a month. Even though the money wasnt moving through the economy anymore monthly payrolls expand by 100,000 jobs a month. Its a mathematically verifiable fact that what you just claimed is wrong.

That isnt something you can gauge, so your assertion is pulled from no where.

I am simply pointing out that the graph you used shows that the stimulus failed.

And you did a very poor job at that.

 

[Uncensored2008]

no. the rational behind it is that people will save a portion of their tax cut just like they do with the rest of their wages. Thats why the multiplier is less than 1.

Whether the mechanism is tax cuts or a check ala Bush, there still is no difference indicated in behavior.

In both cases though, virtually the entire amount went to service debt, leaving the multiplier closer to zero.

How is that not relevant? The bill was 10% the scale of the problem. Conservatives laugh when liberals claim the bill wasnt large enough but its a mathematically verifiable fact. GDP decreased by 5% in Q1 2009 alone. $700 billion is about 5% of GDP. At most it would offset one quarter of losses.

So you're claiming that $700 billion in stimulus was spent in Q1 2009?

Really?

What!? Prior to the stimulus the economy was losing 800,000 jobs. After the money ran out in june the economy has still been adding 100,000 jobs a month.

The economy shed massive numbers of jobs in 2008-09 as the housing bubble burst and took out half-the economy. Recovery started in the job market long before the first dollar of stimulus was spent.

So we see that job loss slowed at a steady pace starting in February of 2009. The first dollar of Porkulus was spent in August of 2009.

Kind of hard to argue causation.

Even though the money wasnt moving through the economy anymore monthly payrolls expand by 100,000 jobs a month. Its a mathematically verifiable fact that what you just claimed is wrong.

Not at all.

We saw job loss decline prior to the stimulus, virtually no alteration as a result and a flat line since.

And you did a very poor job at that.

You might want to reconsider.

The stimulus had zero positive effect on employment.

 

[Brutus]

LMAO god anti-keynsians are idiots.

Your liberal graph indicates employment was helped by BO? BO said unemployment would never get to 8%, it rose to 9% and stayed there. It has been the worst unemployment record since the Depression. Plus, he is on track to accumulate more debt than all other American Presidents combined. Plus, many are expecting another recession on top of his first one that never really ended.

See why we are positive a liberal will have a low IQ?

 

[Dragon]

Did you just realize you admitted that WWII and not the New Deal ended the FDR Depression?

What gave you the idea anyone ever claimed anything different? (Other that the blatant partisan idiocy of calling it the "FDR Depression," that is.)

Now tell us, please: exactly HOW did World War II end the Depression?

 

[Brutus]

How is that not relevant? The bill was 10% the scale of the problem. Conservatives laugh when liberals claim the bill wasnt large enough but its a mathematically verifiable fact. GDP decreased by 5% in Q1 2009 alone. $700 billion is about 5% of GDP. At most it would offset one quarter of losses.

it is absolutely pure and perfect liberal ignorance to believe that Federal spending can make up for GDP loss. It is just as stupid as believing in the sun God. Now we can understand that humans were ignorant enough to worship the sun, Hitler, Stalin and Mao just by seeing the liberal cancer that is here now.

 

[Brutus]

How is that not relevant? The bill was 10% the scale of the problem. Conservatives laugh when liberals claim the bill wasnt large enough but its a mathematically verifiable fact. GDP decreased by 5% in Q1 2009 alone. $700 billion is about 5% of GDP. At most it would offset one quarter of losses.

In fact, any government spending is offset by government taxing so there is no net gain in GDP. In fact there is a net loss because goverment spending creates a bubble that bursts making things worse. Ever heard of the housing bubble?

A liberal will be perfectly ignorant.

 

[Uncensored2008]

In fact, any government spending is offset by government taxing so there is no net gain in GDP. In fact there is a net loss because goverment spending creates a bubble that bursts making things worse. Ever heard of the housing bubble?

A liberal will be perfectly ignorant.

In fact, the net present value of the stimulus dollar with a 10% discount over 10 years is $3.60

This is based on 6% inflation and 4% interest on the debt, compounding every 30 days.

Doesn't make a 1.44 multiplier a real good investment....

 

[Brutus]

Now tell us, please: exactly HOW did World War II end the Depression?

1) we drafted 12 million Americans who then were considered employed

2) during WW 2 all the worlds's economies except ours were bombed to smitherines. No real competition from Japan until 1980 or so!!

to a liberal this is proof that stimulus works!!!

 

[Brutus]

In fact, any government spending is offset by government taxing so there is no net gain in GDP. In fact there is a net loss because goverment spending creates a bubble that bursts making things worse. Ever heard of the housing bubble?

A liberal will be perfectly ignorant.

In fact, the net present value of the stimulus dollar with a 10% discount over 10 years is $3.60

This is based on 6% inflation and 4% interest on the debt, compounding every 30 days.

Doesn't make a 1.44 multiplier a real good investment....

please explain; are you talking about the net present value of a stimulus dollar spent by Washington or a stimulus dollar spent by the person who earned it??

See why we are positive a liberal will have a low IQ?

 

[Uncensored2008]

[please explain; are you talking about the net present value of a stimulus dollar spent by Washington or a stimulus dollar spent by the person who earned it??

See why we are positive a liberal will have a low IQ?

The Washington dollar.

So they pump $1 into the economy, it costs the economy $3.60 - and the Keynesians think they made things all better...

 

[expat_panama]

...Did you even look at the graphs at all? Here, ill post more for you.

During the time the stimulus money was making its way through the economy the growth in GDP was faster than in 2007. <---- FACT

That graph shows what 'tradingeconomics.com' says about the BEA's gdp numbers, but it's not what the BEA says:

Data Series: Gross Domestic Product, (Bil. Ch. 2005 $, SAAR)
Source: Bureau of Economic Analysis (BEA): National Income and Product Accounts (NIPA): [Table 1.1.6, 1.2.6, 1.3.6, 1.4.6, 1.5.6, 1.7.6, 1.8.6]
Frequency: Quarterly
Transformation: Annualized Growth

2003Q1 1.68 2006Q1 5.15 2009Q1 -6.67
2003Q2 3.43 2006Q2 1.63 2009Q2 -0.69
2003Q3 6.75 2006Q3 0.05 2009Q3 1.69
2003Q4 3.67 2006Q4 2.75 2009Q4 3.80
2004Q1 2.66 2007Q1 0.54 2010Q1 3.93
2004Q2 2.60 2007Q2 3.65 2010Q2 3.79
2004Q3 3.01 2007Q3 2.95 2010Q3 2.51
2004Q4 3.31 2007Q4 1.70 2010Q4 2.35
2005Q1 4.19 2008Q1 -1.77 2011Q1 0.36
2005Q2 1.79 2008Q2 1.32 2011Q2 1.33
2005Q3 3.21 2008Q3 -3.66
2005Q4 2.07 2008Q4 -8.89

--that any boost the stimulus packages gave was weak and short lived, especially compared to that of the '03 tax cuts.

 

[Brutus]

[please explain; are you talking about the net present value of a stimulus dollar spent by Washington or a stimulus dollar spent by the person who earned it??

See why we are positive a liberal will have a low IQ?

The Washington dollar.

So they pump $1 into the economy, it costs the economy $3.60 - and the Keynesians think they made things all better...

or, they forget that to pump a dollar into the economy they must first pump it out of someones pocket. The great liberal psychoses makes them think a dollar becomes magical when the bureaucrats spend it but not when the people who earned it spend it in sustainable ways.

 

[cbirch2]

How is that not relevant? The bill was 10% the scale of the problem. Conservatives laugh when liberals claim the bill wasnt large enough but its a mathematically verifiable fact. GDP decreased by 5% in Q1 2009 alone. $700 billion is about 5% of GDP. At most it would offset one quarter of losses.

it is absolutely pure and perfect liberal ignorance to believe that Federal spending can make up for GDP loss. It is just as stupid as believing in the sun God. Now we can understand that humans were ignorant enough to worship the sun, Hitler, Stalin and Mao just by seeing the liberal cancer that is here now.

GDP = private consumption + gross investment + government spending + (exports &#8722; imports). Someone doesnt know what GDP is.

 

[cbirch2]

...Did you even look at the graphs at all? Here, ill post more for you.

During the time the stimulus money was making its way through the economy the growth in GDP was faster than in 2007. <---- FACT

That graph shows what 'tradingeconomics.com' says about the BEA's gdp numbers, but it's not what the BEA says:

Data Series: Gross Domestic Product, (Bil. Ch. 2005 $, SAAR)
Source: Bureau of Economic Analysis (BEA): National Income and Product Accounts (NIPA): [Table 1.1.6, 1.2.6, 1.3.6, 1.4.6, 1.5.6, 1.7.6, 1.8.6]
Frequency: Quarterly
Transformation: Annualized Growth

2003Q1 1.68 2006Q1 5.15 2009Q1 -6.67
2003Q2 3.43 2006Q2 1.63 2009Q2 -0.69
2003Q3 6.75 2006Q3 0.05 2009Q3 1.69
2003Q4 3.67 2006Q4 2.75 2009Q4 3.80
2004Q1 2.66 2007Q1 0.54 2010Q1 3.93
2004Q2 2.60 2007Q2 3.65 2010Q2 3.79
2004Q3 3.01 2007Q3 2.95 2010Q3 2.51
2004Q4 3.31 2007Q4 1.70 2010Q4 2.35
2005Q1 4.19 2008Q1 -1.77 2011Q1 0.36
2005Q2 1.79 2008Q2 1.32 2011Q2 1.33
2005Q3 3.21 2008Q3 -3.66
2005Q4 2.07 2008Q4 -8.89

--that any boost the stimulus packages gave was weak and short lived, especially compared to that of the '03 tax cuts.

"--that any boost the stimulus packages gave was weak and short lived, especially compared to that of the '03 tax cuts."

Look at your own numbers again. At the very least the stimulus raised GDP 2 percent for at least a year and a half. While bushes tax cuts gave 1 percent growth over the same period of time.

 

[cbirch2]

no. the rational behind it is that people will save a portion of their tax cut just like they do with the rest of their wages. Thats why the multiplier is less than 1.

Whether the mechanism is tax cuts or a check ala Bush, there still is no difference indicated in behavior.

In both cases though, virtually the entire amount went to service debt, leaving the multiplier closer to zero.

You dont even know what the stimulus was spent on...nice...

Anyways, the largest portion was tax cuts, about 40%. The actual portion of the stimulus that went to state and local budgets was more like 10%. And debt service has a multiplier of 1, fyi. Nothing short of burning money has a multiplier of 0.

How is that not relevant? The bill was 10% the scale of the problem. Conservatives laugh when liberals claim the bill wasnt large enough but its a mathematically verifiable fact. GDP decreased by 5% in Q1 2009 alone. $700 billion is about 5% of GDP. At most it would offset one quarter of losses.

So you're claiming that $700 billion in stimulus was spent in Q1 2009?

Really?

no, im trying to demonstrate the mathematically inadequate scale of the response. wow.

The economy shed massive numbers of jobs in 2008-09 as the housing bubble burst and took out half-the economy. Recovery started in the job market long before the first dollar of stimulus was spent.

So we see that job loss slowed at a steady pace starting in February of 2009. The first dollar of Porkulus was spent in August of 2009.

Kind of hard to argue causation.

So what is your version of events here? That the downturn was part of the business cycle, rather than a unnatural economic cataclysm, and would have corrected itself had obama not interfered?

Mine is that large scale government intervention began in 2008 mostly through the federal reserve and somewhat through inadequate bush stimulus. Obviously that had an impact on the economy before the stimulus did. It was a credit crises, so the fed was able to stem it by guaranteeing liquidity. But the obama stimulus was just a continuation of that countercyclical monetary and fiscal policy. To say it had absolutely no effect is a lie, its entirely wishful thinking on your part. There isnt an economist in the world that would suggest it had "zero impact". Your suggesting that $288 billion in tax cuts had no economic impact? Preventing states from firing workers, and therefore preserving aggregate demand, had "zero impact"? Yea right.

And now the reality is that republicans are demanding us to pursue procyclical austerity measures at a time when the markets are so eager to finance US debt that treasury yields are at record lows and the market is begging for increased demand.

Even though the money wasnt moving through the economy anymore monthly payrolls expand by 100,000 jobs a month. Its a mathematically verifiable fact that what you just claimed is wrong.

Not at all.

We saw job loss decline prior to the stimulus, virtually no alteration as a result and a flat line since.

And you did a very poor job at that.

You might want to reconsider.

already have

The stimulus had zero positive effect on employment.

Lol.

 

[expat_panama]

...what the BEA says:

Data Series: Gross Domestic Product, (Bil. Ch. 2005 $, SAAR)
Source: Bureau of Economic Analysis (BEA): National Income and Product Accounts (NIPA): [Table 1.1.6, 1.2.6, 1.3.6, 1.4.6, 1.5.6, 1.7.6, 1.8.6]
Frequency: Quarterly
Transformation: Annualized Growth

2003Q1 1.68 2006Q1 5.15 2009Q1 -6.67
2003Q2 3.43 2006Q2 1.63 2009Q2 -0.69
2003Q3 6.75 2006Q3 0.05 2009Q3 1.69
2003Q4 3.67 2006Q4 2.75 2009Q4 3.80
2004Q1 2.66 2007Q1 0.54 2010Q1 3.93
2004Q2 2.60 2007Q2 3.65 2010Q2 3.79
2004Q3 3.01 2007Q3 2.95 2010Q3 2.51
2004Q4 3.31 2007Q4 1.70 2010Q4 2.35
2005Q1 4.19 2008Q1 -1.77 2011Q1 0.36
2005Q2 1.79 2008Q2 1.32 2011Q2 1.33
2005Q3 3.21 2008Q3 -3.66
2005Q4 2.07 2008Q4 -8.89

--that any boost the stimulus packages gave was weak and short lived, especially compared to that of the '03 tax cuts.

...the stimulus raised GDP 2 percent for at least a year and a half. While bushes tax cuts gave 1 percent growth over the same period of time.

Not sure what you're refering to but here's a plot of the BEA's gdp %'s:

They got another number coming out later this week.

 

[Brutus]

How is that not relevant? The bill was 10% the scale of the problem. Conservatives laugh when liberals claim the bill wasnt large enough but its a mathematically verifiable fact. GDP decreased by 5% in Q1 2009 alone. $700 billion is about 5% of GDP. At most it would offset one quarter of losses.

it is absolutely pure and perfect liberal ignorance to believe that Federal spending can make up for GDP loss. It is just as stupid as believing in the sun God. Now we can understand that humans were ignorant enough to worship the sun, Hitler, Stalin and Mao just by seeing the liberal cancer that is here now.

GDP = private consumption + gross investment + government spending + (exports &#8722; imports). Someone doesnt know what GDP is.

no idea what that has to do with stimulus?? Do you?? If so why be so afraid to explain?????? You're uber simplistic liberal idiotic formula would imply that government spending or stimulus can be set anywhere to perfectly control GDP?? When the reality is the more the libturds spend the less the private sector spends so there is no gain possible.

 

[cbirch2]

...what the BEA says:

Data Series: Gross Domestic Product, (Bil. Ch. 2005 $, SAAR)
Source: Bureau of Economic Analysis (BEA): National Income and Product Accounts (NIPA): [Table 1.1.6, 1.2.6, 1.3.6, 1.4.6, 1.5.6, 1.7.6, 1.8.6]
Frequency: Quarterly
Transformation: Annualized Growth

2003Q1 1.68 2006Q1 5.15 2009Q1 -6.67
2003Q2 3.43 2006Q2 1.63 2009Q2 -0.69
2003Q3 6.75 2006Q3 0.05 2009Q3 1.69
2003Q4 3.67 2006Q4 2.75 2009Q4 3.80
2004Q1 2.66 2007Q1 0.54 2010Q1 3.93
2004Q2 2.60 2007Q2 3.65 2010Q2 3.79
2004Q3 3.01 2007Q3 2.95 2010Q3 2.51
2004Q4 3.31 2007Q4 1.70 2010Q4 2.35
2005Q1 4.19 2008Q1 -1.77 2011Q1 0.36
2005Q2 1.79 2008Q2 1.32 2011Q2 1.33
2005Q3 3.21 2008Q3 -3.66
2005Q4 2.07 2008Q4 -8.89

--that any boost the stimulus packages gave was weak and short lived, especially compared to that of the '03 tax cuts.

...the stimulus raised GDP 2 percent for at least a year and a half. While bushes tax cuts gave 1 percent growth over the same period of time.

Not sure what you're refering to but here's a plot of the BEA's gdp %'s:

They got another number coming out later this week.

Either you dont understand math or your deliberately trying to pollute the debate with false equivalencies and what essentially amount to lies.

Your honestly comparing total GDP growth 2003 - 2007 to 2008 - 2011 in order to gauge the effectiveness of obamas policies? GDP growth in Q1 2003 was slightly positive, in Q4 2008 it was -8%. They were enacted in totally different situations, and you need to differentiate that graph in order to be correct.

The derivative of that graph is the one that would actually give you a fair comparison. That is how you would gauge how well counter cyclical policy effected GDP, and you clearly do not understand that.

Thats what i tried to do in the first place. You need to look at the total change in that graph.

In 2 years of countercyclical fiscal and monetary policy during bush and obama GDP growth (first order derivative of GDP) went from -8 % to +3%. That gives you a change in GDP growth (second order derivative of GDP) of 11%.

Under bush GDP growth went from 1%, to about 3% two years later. Which gives you a chance in GDP growth of 2%.

That ignores peaks, which you should thank me for.

Is that too hard to understand?

The stimulus had to dig us out of a bigger hole than bush's tax cuts did, you didnt take that into account.