The Unbroken Window

Kill $900 billion of private sector output to get an additional $600 billion of public spending through. All good spending too, I bet. Here is the piece.
By the way, Barro was a longtime (long ago) faculty member here at the U of R.
I’d love to see someone else’s model of this spending.

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From peak to trough during this recession, the US economy lost about 3.8% of GDP – or roughly $560 billion in real output. This is generally considered a “national emergency” by economists like Brad DeLong. The economy has since gained a little of that loss back.
To put this in perspective, consider that federal government tax [...]

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There once was a family that sat down to do its taxes. The family usually overwitholds a small amount each year – not enough to make it a real economic cost, but enough so that it is unlikely they will have to make tax payments at tax time each year. In 2010, when they were [...]

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If you take the classical Keynesian interpretation of the role of government in the economy and compare it to what a “true” Keynesian ought to advocate for based upon a careful reading of Keynes’ work, you might find yourself a little confused.
The classic Keynesian argument is that the government can play an important role in [...]

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It is well known that Paul Krugman has morphed from Nobel Prize winning columnist into something else. Nonetheless, it is still fun to analyze what he is saying when he pretends to be wearing his economist hat. Take for example the issue of whether or not we should be worrying about having a debt to [...]

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A lot! The following plots (real) household real estate value between 2000 and 2009.

Since the peak, the U.S. has “lost” about $8 trillion in real estate wealth – or about 33% of the value it held at its peak in 2006. However, if you break out the value of real estate into the value embedded [...]

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It seems to be a lot!
Since the the real value of household wealth hit is peak in the U.S. in the 4th quarter of 2006 through the trough in the first quarter of 2009, total U.S. household wealth (including real estate and equities) fell by 23.6% or about $20 trillion. The value of household assets [...]

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Even during a speech at West Point regarding sending more of our men and women off to war in Afghanistan, the President could not help but invoke the “fact” that he inherited the worst economic crisis since the Great Depression. Well, that may be so. I can pull out data to support this (it was [...]

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So the Administration is happy that TARP is going to be less costly than planned, and expects to not have to spend $200 billion of it (but it will, on beer goggle research – see prior post). But I just learned that “Treasury expects the bailout to cost $200 billion less than expected, and that [...]

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From the Redwood forests of California:
In a required state report to the federal government, the university system said the $268.5 million it received in stimulus funding through October allowed it to retain 26,156 employees.
That total represents more than half of CSU’s statewide work force. However, university officials confirmed Thursday that half their workers were not [...]

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