Russ Roberts reminds us just how shovel ready the stimulus projects were/are:
In the first eight months of the $787 billion “stimulus” package, the government has managed to spend about $111 billion, less than half of the funds that are available. What are those dollars going to? Here are the top four federal spenders:
HHS $33 billion
Labor $28 billion
Education $21 billion
Social Security Administration $13 billion
They account for 86% of the spending to date.
I don’t think those departments have very many shovels. But let’s give them more money. After all, in the Keynesian world view, it’s all about getting money spent and getting that multiplier working. Too bad we didn’t make that first stimulus even bigger. All money well spent, right?
BTW, I wonder how the cash for clunkers program is going. Did the dealers get their money yet? Anyone know?
Not having the time and resources — OK, I’m being lazy rather than contributing to the Wintercow seminar — I wonder whether the mythical Keynsean multiplier has ever manifested itself. Being a veteran of reading the economic laboratory section of Barrons and the fine print in the Journal, not to mention other sources, I’m hard pressed to find any evidence proving it ever happened. That is, that the multiplier was ever greater than 1.
Do you know of any such occasion?
Robert Barro has done extensive work and found the “multiplier” to be anywhere between zero and one. Much closer to zero.
The economic czar in the current White House has done her own research that contradicts the gist of current policy too. Romer has found that if we are going to see positive and larger multipliers, they are likely to come from tax reductions and less so from increased spending.
The 1.57 number (how is that for precision) that the current administration uses to justify this current stimulus of purely mythical.