How Much Did the Stimulus Package Stimulate?

by Dave Schuler on April 17, 2012

This is probably a question that will be debated for generations. John B. Taylor draws attention to a study that compares Taylor’s model, a model from Christiano, Eichenbaum and Rebelo, the Bank Canada’s model, two Federal Reserve models, and the IMF’s model to evaluate the results of the ARRA. The CEE model, which found a high Keynesian multiplier, seems to be an outlier.

{ 124 comments… read them below or add one }

jan April 18, 2012 at 7:37 pm

Steve

Have you been following WI, and how Walker’s reforms introduced more competition into the health care plan options for schools? The main insurance company supplying these plans, had to drastically cut their premium costs, when other companies came in with lower estimates. This alone impacted some of the deficits that were encumbering schools. Also, this year property taxes I believe were lowered (or at least didn’t go up), mainly due to some of these health insurance reforms that were initiated.

I guess we’re just going to have to agree to disagree on this one.

Icepick April 18, 2012 at 8:04 pm

It makes me obscurely proud to have you despise me.

It’s a glass half-full or half-empty kind of thing.

Believe it or not, I’m the one of the least mean members of my blood relatives on my mother’s side. You have no idea what I delete before posting….

Icepick April 18, 2012 at 8:05 pm

Also, my wife scored a 47 on the Murray test.

Drew April 18, 2012 at 8:36 pm

Here is my problem Ben, explain to me if there is any effective limit on how much money the government can print? Because if the answer is no, then really what is the problem. Just print more money and problem solved. Or run really gigantic deficits, problem solved. Is there absolutely no

(in best Ronald Reagan intonation) Well, there you go again, Steve v, being logical and all……

I see the thread is having a jolly good time. I’ll just warn ice pick, and all his hillbilly ancestry, that I’ve worked with Italians for the last 13 years. Ya never hear them coming. Bang, it’s over.

;-)

Icepick April 18, 2012 at 10:00 pm

You think one of them Goombas isn’t going to stick out in the hood? My highly insecure location is my greatest security asset! (That, and an almost fanatical devotion to the Pope.) We got your former Tonton Macoutes (well, former FRAPHists, anyway), Haitian street gangs, Jamaican murder posses, plus regular old home-grown crime. We don’t get the Mexican stuff in this part of town, though, for which I am grateful. Those Mexican gangs are fucking nuts. Is there an Italian connection through Port-au-Prince?

Seriously, I drive right by the house this guy grew up in every day – and the neighborhood is a lot rougher NOW than it was THEN. We turn out monsters down here….

The whole city has gotten weird, though, since the Trayvon Martin – George Zimmerman thing hit the headlines. In just the last few days we had an apparent sniper attack on I-4 near the Maitland overpass (not a bad area), two high school students from Winter Park were murdered a couple of mornings ago and their bodies incinerated on a nice pleasant jogging trail, some armed robbers invaded an apartment less than a mile from here and threatened to execute a couple of toddlers for crying, etc. It’s just – weird. I don’t think it has anything to do with the Zimmerman case, that’s just the timing. It’s just off down here.

Icepick April 18, 2012 at 10:06 pm

Concerning the high school students who got incinerated:

Deputies told Local 6 that Nicholas [Presha] is the son of Bernie Presha, an investigator for the state attorney’s office and longtime former Orange County sheriff’s deputy.

It’s just weird…. (I assume Mr. Presha works for the state district we both live in, which means he wouldn’t have anything to do with the Zimmerman case.)

michael reynolds April 19, 2012 at 12:00 am

I used to live in Maitland. In my day it was down-market but not dangerous. And Winter Park was quite nice.

At some point Florida took over from California as Land O’ Weird. I think maybe our last really epic bad guy was Manson. Nowadays if someone is burying people alive or chopping up bodies it’s most likely Florida.

Then again Dahmer was Wisconsin and I believe he still holds the Guinness record for “That’s Totally F-cked Up.”

michael reynolds April 19, 2012 at 12:04 am

From Wiki article on Dahmer:

As one officer subdued Dahmer, the other opened the refrigerator and found a human head.

Yep, that’ll do it.

michael reynolds April 19, 2012 at 12:11 am

Then again, as a liberal, I appreciate this touch:

Unlike many serial killers, Dahmer killed victims from a variety of racial backgrounds.

I like Dahmer as a counter to the “nurture” point of view. I don’t know what the hell Mr. and Mrs. Dahmer were up to with young Jeffrey, but I’m pretty sure he overreacted.

Ben Wolf April 19, 2012 at 3:17 am

@Drew

There’s no hard limit on government’s capacity to print money, nothing that literally stops it from making more. The soft constraint, one we impose on it ourselves if we don’t want to ruin our economy, is inflation. If government spends too much it begins competing with the private sector for real resources and causes prices to rise. That crowds out private sector spending and creates hardship. The government could decide to spend $100 trillion per year on health care and in the process destroy it because the doctors, nurses, hospitals, drugs and myraid materials to support that level of spending just aren’t there. Spending must never exceed the country’s productive capacity.

Havng said that we can afford (in inflationary terms) some increased level of spending over where we are now. Our persistent high unemployment is a result of idle resources the private sector’s spending can’t employ right now. The way I see it just send a check for $500 to every household in America every month and call it the Social Security Minimum Income, tie it to the rate of inflation and administer it through the existing Social Security Administration. You reduce wasteful government spending and eliminate politicians’ capacity to hijack the money for pet projects, you get increased spending which means increased incomes, it’s automatic stimulus in good times and bad which means no packages need be passed when we fall into recession and employment and most importantly, every american gets additional freedom to choose how to live their lives.

SSMI would also eliminate the complaint that corporations aren’t paying their employees enough to keep ahead of inflation, which I argue shouldn’t be something expected of them anyway. It’s not their job to make sure people are comfortable, national priorities are the government’s responsibility. It’s win-win for the american people unless the spending becomes too high and spurs inflation. To ensure that doesn’t happen dump the program in the Federal Reserve’s lap. It gives them a fiscal tool and, if there’s one thing the Fed is good at, it’s being scared stiff of initiating damaging price rises.

Andy April 19, 2012 at 6:29 am

Florida definitely has some weirdos. My theory is they left California and come to Florida because of the former’s high taxes and regulatory burden.

Ice,

Well, that sounds impressive, but what is really more dangerous – a Jamaican murder posse or the legions of minivans from out-of-state cutting across five lanes of traffic to make the Disney exit? And don’t get me started on snowbirds – they’ve almost killed me twice since I arrived in January. Personally, I think the most dangerous place to live in Florida is anywhere near a Country Kitchen Buffet (or it’s many knockoff’s).

Dave Schuler April 19, 2012 at 6:32 am

the most dangerous place to live in Florida is anywhere near a Country Kitchen Buffet

Maybe we should try to get a congressional investigation.

Icepick April 19, 2012 at 6:53 am

Then again Dahmer was Wisconsin and I believe he still holds the Guinness record for “That’s Totally F-cked Up.”

Dahmer wins, but this guy came closer to the title than most people know. I had a minor connection to someone involved in the case, and their were details about this that never made the press. The spreee in Gainesville was even more horrific than advertized.

Well, that sounds impressive, but what is really more dangerous – a Jamaican murder posse or the legions of minivans from out-of-state cutting across five lanes of traffic to make the Disney exit?

Well Hell, Andy, you can’t go comparing regular old criminals and psycopaths to tourist drivers – of course the drivers are more dangerous. But they’re out of their minds from travel, tired and experiencing the ecstacy of nearing a long-sought goal. (That would be getting out of the car and away from their children after being trapped with them for 20 hours.)

My biggest fear from tourists used to be seeing mostly naked Canadians in January and February – blindingly white skin. I was always afraid I would drive into on-coming traffic or suffer some other tragedy related to sudden blindness.

Icepick April 19, 2012 at 8:09 am

Economy Update:

Looking around town there are definite signs of life returning to the economy.

First, I’m starting to notice some commercial construction taking place again. The levels I’m seeing are the lowest levels of my lifetime, except for the last four years, but it is happening. Things like a new convenience store being built across the street from SeaWorld, or an autoparts store building a new building across the street from its current location.

Some of it (like the SeaWorld bit) are heavily location dependent. The autoparts store thing is weird though, because there is lots of empty retail space in that area. I don’t think it is a good sign that it is cheaper and more convenient for them to build in an area where approximately 50% of the commercial retail space is empty and begging for customers. But it is better than nothing.

Also, a friend’s husband got recalled by his old company – after four years. I don’t know if he got his old job, or can expect the old hours, or what, but it is a good sign. His company does big commercial construction projects and builds high-rises.

Which gets me to the local housing market. Driving someplace I normally don’t drive about a month ago I discovered that they never actually stopped building houses in one part of Orange County. Whole new developments had cropped up since I last drove through there, over three years ago. The catch? The houses in that area START in the $500s! Yikes! While the rest of Central Florida was dying they kept throwing up more houses for people that could afford to drop more than half-a-mil on a vacation home!

Also, the Orlando Sentinal has a story today about the rebounding market for expensive condos in the towers downtown. People apparently are hoping to drop a million on condos just to say they can!

So things are improving.

sam April 19, 2012 at 8:10 am

@MR
“Then again Dahmer was Wisconsin and I believe he still holds the Guinness record for “That’s Totally F-cked Up.”

You know this book, Michael? Wisconsin Death Trip.

@Andy
“Florida definitely has some weirdos. My theory is they left California and come to Florida because of the former’s high taxes and regulatory burden.”

So, Wright’s observation that Route 66 was a chute down which everything loose in the US rolled into Southern California has undergone an historical reversal? I dunno. I think the nuts are still rolling down there.

Icepick April 19, 2012 at 8:28 am

Sam, there’s been a backwash from California because of all the immigration coming UP from Mexico. It has forced a change of direcrtion for a lot of the flow from other routes. Also, I-10 has been built, so naturally the flow is taking the southernmost American route available. But with Arizona, Nevada, New Mexico and Texas also filling up with Mexicans, the flow keeps pushing eastward. Thanks to Florida’s penisular dip into the Atlantic, we’re the catch-all for this side of the country. And the heaviest crazies will sink to Florida. (Look at South Beach.) It’s all simply a matter of plumbing and gravity.

All things told, I miss the days of the cocaine cowboys. We still had serial killers, but they were the more accomplished sort who were coming here for the weather.

Andy April 19, 2012 at 9:23 am

I’m from the Denver area and Colorado has seen a huge influx of Californians over the last decade and I don’t think that’s a good thing. Many came fleeing California’s high cost of living and taxes yet they demand a California-level of government services. I thought it was bad when the Texans were moving in during the late 1970′s and early ’80′s, but they were just annoying in comparison to the West-coasters we’re currently getting.

As far as Florida goes, in my area there are very few from California – the transplants are dominated by New Yorkers and New Jersey’ers (or whatever you call them).

sam April 19, 2012 at 9:50 am

“. Many came fleeing California’s high cost of living and taxes yet they demand a California-level of government services.”

And therein lies a great tale.

Andy April 19, 2012 at 10:12 am

Actually, I don’t know why Californian’s are migrating and screwing up my home state, but that seems to be the common perception. If anything, I’d put cost of living and jobs at the top of the list.

Icepick April 19, 2012 at 10:28 am

New Jersey’ers (or whatever you call them).

asshole usually covers it.

Steve Verdon April 19, 2012 at 11:50 am

Then again Dahmer was Wisconsin and I believe he still holds the Guinness record for “That’s Totally F-cked Up.”

I don’t know Ed Gein and Albert Fish would certainly give him some very tough competition. And Gein was also in Wisconsin. Gein can be said to have inspired a number of fictional killers: Leather Face, Norman Bates, and Buffalo Bill (Silence of the Lambs).

Searching the house, authorities found:[14]

Four noses
Whole human bones and fragments[15]
Nine masks of human skin[16]
Bowls made from human skulls
Ten female heads with the tops sawn off
Human skin covering several chair seats
Mary Hogan’s head in a paper bag[17]
Bernice Worden’s head in a burlap sack[18]
Nine vulvae in a shoe box[19]
A belt made from female human nipples[20]
Skulls on his bedposts
A pair of lips on a draw string for a window-shade
A lampshade made from the skin from a human face

Upon searching Gein’s property, investigators discovered Worden’s decapitated body in a shed, hung upside down by ropes at her wrists, with a crossbar at her ankles. The torso was “dressed out” like that of a deer.

Wow, talk about thread derailment.

Icepick April 19, 2012 at 12:07 pm

Ten female heads with the tops sawn off

Well, DUH. How else are you going to use them for serving bowls? (Turning them upside down is just gauche, as well as impractical.)

Steve Verdon April 19, 2012 at 2:54 pm

That is precisely what he used them for, according to another source. I think Gein probably beats Dhamer in the “that’s so fucked up category.”

Icepick April 19, 2012 at 8:09 pm

Yeah, I think you’re right about that, Steve V. For the record, I didn’t KNOW he used them for serving bowls, it just made sense.

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