CBO: Stimulus "a net drag on the economy"

[NYcarbineer]

All they said was that added debt crowds out private investment in the long term.

The same exact principle applies to the debt created by the lost revenue of the Bush tax cuts and the deficits they created.

 

[naturegirl]

All they said was that added debt crowds out private investment in the long term.

The same exact principle applies to the debt created by the lost revenue of the Bush tax cuts and the deficits they created.

Gaaaahhhhh!! Stop!! The stimulus was a disaster, it's all 0bamazzzz. Bush has been gone three years. It's now Bozo's economy!! $250,000.00 per job is not a way to stop the reckless debt.

 

[Zander]

All they said was that added debt crowds out private investment in the long term.

The same exact principle applies to the debt created by the lost revenue of the Bush tax cuts and the deficits they created.

Not really. Obama spent trillions of $$- literally flushed it down the toilet, or used it to pay off his cronies. Bush put the money back into the hands of the people who earned the money. There is a HUGE difference....

As a bonus - The Bush tax cuts in 2004-06 produced the highest two-year tax revenue increase in the preceding 40 years. According to the Office of Management and Budget, Historical Tables, Budget of the United States Government, Fiscal Year 2007 (Washington, D.C.: U.S. Government Printing Office, 2006, pp. 25-26, Table 1.3, Jan. 16, 2007), with final 2006 revenue figures added in, there was an inflation-adjusted 20% tax revenue increase between 2004 and ’06, and this represents the largest two-year revenue surge since 1965-67.

 

[occupied]

It's easy to sit around and say "I told you so", maybe some of you actually did, but what would have happened if the government had turned to it's people and said "you are on your own" after it had just shelled out billions in TARP bailouts? OWS would have started earlier and have actual torches and pitchforks. Perhaps that would have been best, we needed to be in Wall Street's face the next day, not three years later.

 

[CrusaderFrank]

It didn't work for FDR, why would Obama steal every page from the FDR Depression playbook?

 

[ladyliberal]

The actual report is quite easy to skim, and its revisions seem to my mind uncontroversial:

http://www.cbo.gov/ftpdocs/125xx/doc12564/11-22-ARRA.pdf

Q: Does the report say the stimulus created fewer jobs than previously believed?

A: No, it says that it may have created fewer jobs than previously believed (incidentally, the jobs numbers completely contradict all the Republicans who claim the stimulus created zero or fewer jobs). This reflects a lessening confidence in the CBO's own methodology, rather than new evidence of weakness of the stimulus notion. In any event, the new range extends just as high as the old one did (3.3 million equivalent jobs in one quarter) and is statistically consistent.

Q: Does the report say that the stimulus will decrease overall production?

A: No. It says (unless I am misreading it) that the effect during certain years will be a decrease in output of 0% to .2%. This is a future time period in which little or no stimulus spending will take place. In other words, the stimulus spending won't stimulate the economy during time periods far removed from any stimulus spending. It also notes that this possible decrease in output will have no effect on employment.

Q: What does the CBO say about the "crowding out" effect?

A: The CBO seems to be agnostic on the subject (http://www.cbo.gov/ftpdocs/114xx/doc11430/04-2010-Working_Paper-Crowding_Out.pdf). At least one of their studies finds no such effect, but also refers to the notion that "crowding out" occurs as the conventional wisdom. In the recent report, their finding that government debt leads to a decrease in output of 0% to .2%, they conclude as much. That range is consistent with either a small or a zero crowding effect.

Q: Are the numbers intended to accurately reflect all effects on future economic variables?

A: No. The report notes, for instance, that getting people jobs now may increase their employability in the future. The report explicitly states that effects such as these (which are generally positive, in my mind) are not included in the model. The CBO is an organization of accountants, not prophets, and they make no claim to providing projections which account for the full complexity of the US economy with mathematical precision.

 

[Quantum Windbag]

CBO said that while the Recovery Act boosted the economy in the short run, the extra debt that the stimulus piled up “crowds out” private investment

Assuming the CBO really said anything of the kind (and considering the source, that is far from certain), they just lost any credibility with any reputable reality-based economists with that statement. The idea that federal debt "crowds out" private investment -- ever -- has no basis in fact whatsoever. The only way it could POSSIBLY hurt private investment is by contributing to rising interest rates, which is obviously not the case at the moment, and even if it were, the phrase "crowds out" would still be inaccurate.

Here's a key to why this may have happened: "The non-partisan agency also has changed its model for the spending’s impact on the economy."

Well, isn't that interesting. The House changes hands, and suddenly, hey, presto! the CBO changes its model and comes out with a claim that the stimulus hurt the economy, and couches the statement in bogus right-wing economic doctrine with no basis in fact to boot.

Nonpartisan my ass.

[ame="http://www.youtube.com/watch?v=2h_rDrd97sY&feature=player_embedded"]CBO: President's "Stimulus" Hurts Long-Term Economic Growth - YouTube[/ame]

Isn't it interesting that you are a complete partisan hack?

 

[Quantum Windbag]

Assuming the CBO really said anything of the kind (and considering the source, that is far from certain), they just lost any credibility with any reputable reality-based economists with that statement.

yes no reputable economists can go against your emotional based wisdom

they are not reality-based if they do

I've forgotten more about economics than most posters on this forum, definitely including yourself, ever knew.

There is no basis whatever for the claim that federal debt ever has, ever can, or ever will "crowd out" private investment, although IF it drives up interest rates that could increase the cost of capital and that might hurt investment. Except that interest rates are so low right now, obviously that isn't a problem.

This is not fact based not because it goes against my "emotional based wisdom" but because it goes against, you know, the facts.

I doubt you ever knew more about economics that the average fifth grader.

 

[Conservative]

CBO said that while the Recovery Act boosted the economy in the short run, the extra debt that the stimulus piled up “crowds out” private investment

Assuming the CBO really said anything of the kind (and considering the source, that is far from certain), they just lost any credibility with any reputable reality-based economists with that statement. The idea that federal debt "crowds out" private investment -- ever -- has no basis in fact whatsoever. The only way it could POSSIBLY hurt private investment is by contributing to rising interest rates, which is obviously not the case at the moment, and even if it were, the phrase "crowds out" would still be inaccurate.

Here's a key to why this may have happened: "The non-partisan agency also has changed its model for the spending’s impact on the economy."

Well, isn't that interesting. The House changes hands, and suddenly, hey, presto! the CBO changes its model and comes out with a claim that the stimulus hurt the economy, and couches the statement in bogus right-wing economic doctrine with no basis in fact to boot.

Nonpartisan my ass.

So... when the CBO agrees with or supports a Democratic position, they are non-partisan. But when they don't, they aren't. Got it.

 

[Listening]

CBO said that while the Recovery Act boosted the economy in the short run, the extra debt that the stimulus piled up “crowds out” private investment

Assuming the CBO really said anything of the kind (and considering the source, that is far from certain), they just lost any credibility with any reputable reality-based economists with that statement. The idea that federal debt "crowds out" private investment -- ever -- has no basis in fact whatsoever. The only way it could POSSIBLY hurt private investment is by contributing to rising interest rates, which is obviously not the case at the moment, and even if it were, the phrase "crowds out" would still be inaccurate.

Here's a key to why this may have happened: "The non-partisan agency also has changed its model for the spending’s impact on the economy."

Well, isn't that interesting. The House changes hands, and suddenly, hey, presto! the CBO changes its model and comes out with a claim that the stimulus hurt the economy, and couches the statement in bogus right-wing economic doctrine with no basis in fact to boot.

Nonpartisan my ass.

More electronic spittle.

Here's a key.....?

Here's a clue.....it is possible the stimulus was a drag on the economy.

 

[Listening]

So... when the CBO agrees with or supports a Democratic position, they are non-partisan. But when they don't, they aren't. Got it.

Yes, during the health care debate all you heard was...

CBO...CBO...CBO....CBO....CBO....CBO....

 

[FireFly]

The GDP did not grow anywhere nearly as fast as the debt (stimulus) spending. That is why we just exceeded 100% debt to GDP ratio. Pre-Stimulus, the debt to GDP ratio was only 74%. That proves that the stimulus created a 26% drag on the economy.

 

[CrusaderFrank]

The GDP did not grow anywhere nearly as fast as the debt (stimulus) spending. That is why we just exceeded 100% debt to GDP ratio. Pre-Stimulus, the debt to GDP ratio was only 74%. That proves that the stimulus created a 26% drag on the economy.

Just like it was supposed to

[ame=http://www.youtube.com/watch?v=xm3VMrKqJSA]VP Biden says he called Jon Corzine for advice - YouTube[/ame]

 

[rdean]

So you had to do it. You made me go find out what he actually said.

He said that at the end of ten years, the stimulus could have a negative impact on the GDP without further action.

The operative words being "without further action".

Not only that, but the estimate is the stimulus led directly to the creation of 3 million jobs.

Now, if you don't believe that, there are 114 Republican Congressmen who voted against the stimulus but took stimulus money to create thousands of jobs in their districts. We sit in front of the Internet. Easy as can be to find out the names of Republicans who voted against the stimulus, created jobs, took credit for the jobs, then said the stimulus they used to create jobs didn't create any jobs. How do they keep track of all the lies?

Republicans Voting Against Stimulus Then Asked Obama for Money - Bloomberg

Alan Simpson, a former Republican senator from Wyoming named by President Barack Obama as co-chairman of a new deficit- reduction commission, said about-faces on government funding aren’t surprising.

“It’s the original sin of Washington -- it’s hypocrisy,” Simpson said. “You can’t do that then say you go out and cut the other stuff.”

 

[FireFly]

Just ask the Weimar Republic how much government stimulus boosted their economy?

Is stuffing money into the pockets of a few people in DC boosting the US economy? - NO!!!

I have yet to see anything of value come from the stimulus. I see no shovel ready projects, no rail, bridges or other infrastructure.

 

[Lakhota]

I love how righties perk up when the CBO says something to their liking - otherwise the CBO is shit to them.

It remains debatable what the true long-term effects of the stimulus will be. However, it helped prevent a Second Great Depression in the short-term.

 

[Wiseacre]

So you had to do it. You made me go find out what he actually said.

He said that at the end of ten years, the stimulus could have a negative impact on the GDP without further action.

The operative words being "without further action".

Not only that, but the estimate is the stimulus led directly to the creation of 3 million jobs.

Now, if you don't believe that, there are 114 Republican Congressmen who voted against the stimulus but took stimulus money to create thousands of jobs in their districts. We sit in front of the Internet. Easy as can be to find out the names of Republicans who voted against the stimulus, created jobs, took credit for the jobs, then said the stimulus they used to create jobs didn't create any jobs. How do they keep track of all the lies?

Republicans Voting Against Stimulus Then Asked Obama for Money - Bloomberg

Alan Simpson, a former Republican senator from Wyoming named by President Barack Obama as co-chairman of a new deficit- reduction commission, said about-faces on government funding aren’t surprising.

“It’s the original sin of Washington -- it’s hypocrisy,” Simpson said. “You can’t do that then say you go out and cut the other stuff.”

Don't the citizens from the repub districts pay taxes? Why shouldn't they get gov't funding, regardless of the party their elected reps belong to. Tell me, should we only fund projects in districts where the elected rep voted for the bill? Oh yeah, that'll hold down spending.

There's no hypocrisy here, those repubs voted for what their constituents wanted and then did what they're supposed to do, fund needed projects in their districts.

 

[bjland2]

i just hope nice people have enough cash to deal with.

 

[Zander]

I love how righties perk up when the CBO says something to their liking - otherwise the CBO is shit to them.

It remains debatable what the true long-term effects of the stimulus will be. However, it helped prevent a Second Great Depression in the short-term.

Not really. We just know more than you. At any rate, the CBO is not the problem. The CBO does exactly what it is told to do. Congress is the problem. For instance, when some hack in Congress wants to make "Obamacare" look like it is "deficit neutral"- they start with 10 years of taking in taxes, and only 4 years of paying benefits. They then have the CBO crunch the numbers. The CBO comes back and says VIOLA!! - Obamacare is "deficit neutral". The results are SHIT and everyone knows it. But it is not the fault of the CBO- they just do what they are told to do.

 

[Wiseacre]

I love how righties perk up when the CBO says something to their liking - otherwise the CBO is shit to them.

It remains debatable what the true long-term effects of the stimulus will be. However, it helped prevent a Second Great Depression in the short-term.

Not really. We just know more than you. At any rate, the CBO is not the problem. The CBO does exactly what it is told to do. Congress is the problem. For instance, when some hack in Congress wants to make "Obamacare" look like it is "deficit neutral"- they start with 10 years of taking in taxes, and only 4 years of paying benefits. They then have the CBO crunch the numbers. The CBO comes back and says VIOLA!! - Obamacare is "deficit neutral". The results are SHIT and everyone knows it. But it is not the fault of the CBO- they just do what they are told to do.

Exactly, they only work with the numbers and projections they're given.