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Dan Gross, columnist and economic editor at Yahoo Finance, and Stephen Moore, senior economics writer for the Wall Street Journal and author of The End of Prosperity debate the pros and cons of the federal stimulus package.
Moore doesn't even get the basics right. He says there is no "multiplier effect" because when government spends money to create or save a job, it comes from the private sector which could also use the money to create or save a job.
The truth is that there is a multiplier effect whenever the government or the private sector creates a job: the recipient of that job has more income and can spend it, creating demand that helps create more jobs. What Moore ignores is the very obvious point that in a recession, the private sector isn't creating jobs--indeed, that's what a recession is. There's simply no private investment to "crowd out." And that's why most economists agree that it's appropriate for government to step in with deficit spending to create jobs, utilize the multiplier effect, and keep the recession from getting worse. Yes, the money has to be paid back later, but it's easier to do when the hole we're climbing out of isn't as deep.
How Daniel Gross could have missed this response is a mystery to me.
Brian...or wnyc, could you really believe that this 10 minute show gave anyone a better understanding of this issue? I mean someone who truly has no left or right wing bias.
I would bet that just about everyone who has commented so far has had a strong opinion on this issue that would never change. These are great issues that I don't (and I'm sure most working people with families) don't have time to reseach in adequate depth.Couldnt the smart people at wnyc examine what each of the guests have said and have a follow up?
This 30 issues in 30 days has had some great issues. I personally have been very disappointed. It hasn't been anymore informative than those old 'Crossfire' shows
OK, maybe 1 issue in 30 days is asking for too much, but wouldnt you agree 1 issue in...5 days be more helpful?
According to FactCheck.org. "Yes, the stimulus legislation increased employment, despite false Republican claims to the contrary... The truth is that the stimulus increased employment by between 1.4 million and 3.3 million people, according to the nonpartisan Congressional Budget Office."
Does everyone seem to forget about the stimulus that the Bush administration passed? I believe that the stimulus worked in preventing what could have been a devastating depression for our country. Were we really expecting it to create prosperity as Cantor said?
Somebody still actually believes in a multiplier effect? Hahaha...It sounds like most liberals don't understand what being productive or being an economic producer really is. It sounds like they think anyone with money to spend, no matter where it came from, is an economic plus. Although we need cops, fire fighters teachers and some bureaucrats, they are not producers nor are they stimulus. Even most government funded infrastructure projects are not stimulus. The incremental improvement made by re-paving or widening a bridge is ridiculously over stated.
Aneece i'll be reading u!
I feel so smart for having written what you just wrote. Think about all I can accomplish with two simultaneous incarnations!
Aneece all that matters is u know the truth.
both of u are "new" here. i have an old profile that i"m proud of.
enjoy your stay here and be glad that "geTaylor " reads our posts.
I mistyped, TARP is under 100 billion not million.
It only matters because he's seeking me out and bringing the crazy, and if he thinks I'm you, he'll find you, too. Now, when he accuses you of being...whatever the heck he thinks we are, you'll know what's going on. I wish we had an ignore feature.
"millton friedman taught us there's no such thing as a free lunch[!]." REALLY!! stephen moore said t-h-a-t? sooooo, where do 'free markets' really come from, santa claus?.. [and good comeback dan gross. maybe poor stephen thought he saw hell freeze over when his childhood dreams of a 'free market' crash all around him.]
energy policy is the real problem underlying all of this former growth, and the repubs desperately want to control that situation. china is ahead of us w/ wind energy, something moore despises, and will not own up to. future manufacturing will need increased energy efficiency, for which the oil/gas industry was not designed to handle efficiently on a technological level. For instance, that gallon of gas in your regular combustion engine car, only 8-9% gets used as actual energy, and the rest is waste. I don't know about hybrids, if anyone out there does, and as for domestic energy policy, solar, i think, is up to 3% [waste would be attributed to the manufacturing process here]. The mineral resources china has are a very big deal in all of this, as well. And there's no such thing as "clean coal". period. And could someone finally tell me how much fresh water is necessary for nuclear plants, b/c when france had that terrible heatwave a few years back, and russia this past years, the nuke plants in france were shut down, and in russia they were considering or one was actually shut down, i don't remember exactly - but that was due to an excessive long term heat wave. Which also led to crop failure here, the wheat, which has implications on it's own. So yeah, energy policy. Go there. energy policy and water policy. Start. There.
jimi won"t take a crappy job either! besides it"s only 2 years, and people on the dole still spend the money so it does help the economy.
Look, if we're going to have a free lunch - let's have a banquet.
Why are we failing to take advantage of the approximately 75% of the population that is fully employed?
Why isn't the upper income portion of this economically "safe-harbored" group regulated to participate in the "Give your neighbor an Income" program. Qualified participants will either hire, at the minimum wage, an unemployed person at a task in their home (i.e., the employed person's) or business for eight , 8 hour days per year; or, the employed person will contribute the equivalent in cash (+ a small amount to cover administrative costs) to the state's unemployment assistance office.Even if this program does not directly employ the surplussed working class, I sure it will have the same beneficial (or deleterious) collateral effects as the "stimulus program" (only more so). Remember, as the President says: "Do unto others as they do to you."
Aneece who is this geTaylor. where is he making such a claim. why does he think that< are u dyslexic also?any way do we care what others think of us??
Do you have any idea what you're talking about? The TARP is under 100 million in terms of costs and has largely been a success - the "Stimulus", i.e. 2009 ARRA bill is almost 800 billion, which is not even 10% of GDP and was obviously NOT sufficient to increase demand and thereby create jobs otherwise the unemployent rate would have gone down, not up. The whole point of the stimulus was to create jobs and while governments role should be temporary it need also be sufficient! Check your facts.
saying something louder or more frequently does not not make it more true.
i would like you to include in the criteria for selecting guests the ablility to answer a question or rebut an argument without shouting or talking over other guests.
this cannot always be known in advance, but a guest who misbehaves this way needn't be invited back, at least not soon.
there are lots of media venues for shouting matches. i expect better from public broadcasting.
I'm not saying that people should not be able to get any help. I'm saying that there are likely a lot of people who will wait at home collecting free money for as long as they can -- rather than take a crappy job. That scenario is counterproductive. If your skills are not current, you need to retool -- and try to honestly earn anyway you can in the meanwhile.
I think the stimulus (TARP) was just about right in size and scope. Even Keynes argued in his theory that government intervention was only meant to be short term in duration, to "prime the pump" and not a long term solution. It was to be a quick shock absorber meant to keep a crash from becoming fatal, like inflatable crash bags kick in during an automobile to save your life from the full impact.
As for tax cuts for the investor class, in those old days it was difficult to shift monies abroad and create jobs rapidly abroad. In today's world, cutting taxes drastically for the very wealthy class does not necessarily mean a hefty increase in local investment if they can get a quicker return on the money by either creating jobs abroad, say in China, or employing illegal immigrant labor. While it may mean a few more jobs for those who build their yachts, and may mean some cheaper imported consumer goods, it does little to stem the growing trade deficits, but usually adds to them. And so I doubt that bringing back the Clinton-era tax rates for the very wealthy will harm job growth in the US very much, but might for our competitors overseas. It may mean some higher prices on imported goods from Asia, but that is exactly what is needed to restore some trade balance.
Dan Gross was eloquent in his closing about why people are not happy about having the financial sector saved. Administration spokespeople should be as articulate.
some nut named geTaylor thinks you and I are the same person, and is attempting to report this "abuse" to the Stasi-- I mean wnyc moderators.
There is more money in the world than ever before. Wall Street has been doing well since the crisis supposedly ended. People are getting richer while most other people are losing jobs or working for stagnating wages. The top is the problem. They're taking everything and pitting us against each other while they do it.
WHY DON'T YOU GET AN ECONOMIST FROM THE EOCNOMIST ON YOUR SHOW FOR AN INTELLIGENT DEBATE?
http://www.good.is/post/americans-are-horribly-misinformed-about-who-has-money/The top 20% own 85% of the wealth of this nation. It just ain't fair, folks. Yesterday's discussion with Paul Krugman pointed out the mystery mathematics these guys are using. Don't believe their sleight of hand and out right lies.
Jimlet them starve??
I want to say that this is the smartest and most informed audience in the country...just read the savvy insight in these Comments...good for you all!
I know this sounds harsh... but paying people to stay home (i.e. extended unemployment) is counter productive. The reality is that there are fewer quality jobs in this country -- but there are also a lot of illegals here filling them.
The economy is all Ronald Reagan's fault.He brought down both communism, and the taxes on the rich. By doing so he created billions of capitalists out of former communist slaves, and provided jobs for the Chinese and illegal immigrants with all the money he saved the rich, who were then free to build factories in China and to hire illegal immigrants to build their McMansions.
Mr. Moore never answers the question - Since businesses have been subsidized by the government for 30 years+ since Reagan, why aren't businesses hiring. They keep saying that investment creates jobs. But businesses are not hiring & thus not guaranteeing their own survival by creating demand.
Fundamental math issue:
This "tax-cuts are the best way to stimulate the economy because it will spur business spending is obvious BS".
I am a small business owner and I know very intimately that businesses pay taxes on PROFIT! If you want to spur growth, increase taxes so that business spend more money on employees!
In 2008, you're talking about the bank bailouts by congress and the Bush administration, not the supposed "stimulus" bill.
The Moore guy is an insult to intelligence. In 2008 I woke one morning and I heard and saw DEPRESSION bearing down on us. COLLAPSE would have did a HECK of a lot more than 'inconvenience' the people. BANKS would have closed. ATMs would have stopped issuing money. Internet Commerce would have gone into a free-fall.
The purpose of the Stimulus was to make sure that the DEPRESSION stayed in the History Books. We still standing, and people like Moore have the privilege of being able to holler and be upset because the SYSTEM STILL WORKS.
The stimulus LOST US 4 MILLION JOBS?!? What color is the sky in his world? Give welfare money to business instead stimulus money to the people. WTF??
I am very disappointed to hear your show stooping to the he-said/she-said approach to discussing policy - or anything else. What good purpose do you think is served by allowing the repetition of the worst kind of talking points under the guise of discussing economic policy?
Do you not notice that, as soon as Gross gets around to finishing an idea, Moore talks over him? Please don't subject your audience to this sort of dreck.
Bush cut taxes for the rich, and we're gonna decide whether to extend them or not. What effect did those Bush's tax cuts have on the economy that since went over the cliff????
Please ask your guests to comment on how much the war is costing our economy.
Fewer factories, not less factories.
Really, Regan? As an economic exemplar? We're living out his legacy right now.
What is this? It seems as if I am hearing the same rant from different or the same people everyday. I am so tired of this. Whatever happened to finding common ground. Oh my bad that never existed. I have decided to tune out all political talking heads until after election day. Sorry WNYC this includes you. I really had enough.
is it ridiculous to have a rigid ideologue versus an actual economic journalist. There is more dogma spewed from the WSJ guy per on-air 'column inch' than on the WSJ editorial page. And Rahm Emanuel, as Michael Moore recently mentioned by famously said !@#$ the UAW-- the unions. get it?Your WSJ guy is relying on "Demon union!" "Demon public sector"!So, you do not have a real discussion here, you have pure disinformation vs realism.
Brian, Steve Moore just dup'ed you. It's not where the $10K came from, it's where does the $10K go - that teacher spends it and that creates demand for other services and jobs. But, you let him twist the question back to where the money came from. That's not the point, it's where does it go - it gets spent!
LONG TERM GROWTH!!!!!
Obama came in with majorities in BOTH houses of congress and frittered it all away because he's a tyro afraid to stand up to the republican base., or doesn't know how. Krugman was right, the "Stimulus" was like a course of antibiotics that wasn't finished - all it did was increase the debt without bringing back aggregate demand - just a half measure that will kill the economy, same as the healthcare reform, same as the banking reform bill ... just a joke. Progressives who support Obama have blinders on - he's ruined this country all because of his awful leadership - at least vote republican and keep a little extra money in taxes, if course you would need a job to enjoy a tax cut LOL!
The stimulus bill was a public employee union pension insurance fund.....200 billion of the 800 went to feed this voracious monster.
That's why most of this infrastructure work was never done and Obambi had to pass a second one last month.
I may not be working due to the stimulus, but I would be homeless if not for the continued NYS Unemployment Insurance compensation.
I'm single with no family who would assist and with less than two months of living expenses in my IRA+401K. Now I am paying off my grad school loans, my credit card, and buying food at my local farmers' market. Who knows come January?
Do not demonize unions......it is easy for you to work the crowds with your comments. You don't know what you are talking about.
Brian: can't you get two people unfettered by party lines?
WSJ to Middle Class -- Bye Bye!
Sounds like Stephen Moore is arguing that the US is sunk unless our economy grows at 5+% every year - forever. That seems very unlikely.
Here is the aspect of this debate I always find strange. We have a large number of economists in agreement that there are a large number of jobs created by the stimulus, we have the people and companies who benefited from the stimulus. The those like Mr. Moore come along and simply state that it was a failure and a waste of money which made things worse!
In the face of the real facts to the contrary, why doesn't Mr. Moore have do do a better job to defend his position? He makes a statement without any factual or statistical backing. Hold him accountable to his statements!
Dan Gross has make a good case based on facts, have Mr. Moore do the same!!!
Stimulus money has definitely made a difference in terms of the way that upstate New York has been able to rebuild bridges and rebuilt parts of our waterfront in Kingston, New York. People who would have been unemployed were employed during this downturn. Kingston is also replacing and repairing sewer lines. I think tax breaks for the private sector has clearly not worked.
The stimulus proves that cutting taxes doesn't work. When you include tax credits as part of the stimulus, only 42% of households paid taxes last year - - and we still have a the biggest recession since WW II.
solution from recent article in The Economist with critique of the right and the left:
"Ways to overhaul the engine
In an ideal world America would commit itself now to the medium-term tax reforms and spending cuts needed to get a grip on the budget, while leaving room to keep fiscal policy loose for the moment. But in febrile, partisan Washington that is a pipe-dream. Today’s goals can only be more modest: to nurture the weak economy, minimise uncertainty and prepare the ground for tomorrow’s fiscal debate. To that end, Congress ought to extend all the Bush tax cuts until 2013. Then they should all expire—prompting a serious fiscal overhaul, at a time when the economy is stronger.
A broader set of policies could help to work off the hangover faster. One priority is to encourage more write-downs of mortgage debt. Almost a quarter of all Americans with mortgages owe more than their houses are worth. Until that changes the vicious cycle of rising foreclosures and falling prices will continue. There are plenty of ideas on offer, from changing the bankruptcy law so that judges can restructure mortgage debt to empowering special trustees to write down loans. They all have drawbacks, but a fetid pool of underwater mortgages will, much like Japan’s loans to zombie firms, corrode the financial system and harm the recovery.
Cleaning up the housing market would help cut America’s unemployment rate, by making it easier for people to move to where jobs are. But more must be done to stop high joblessness becoming entrenched. Payroll-tax cuts and credits to reduce the cost of hiring would help. (The health-care reform, alas, does the opposite, at least for small businesses.) Politicians will also have to think harder about training schemes, because some workers lack the skills that new jobs require.
Americans are used to great distances. The sooner they, and their politicians, accept that the road to recovery will be a long one, the faster they will get there."
I find it utterly ridiculous that we can't even agree on basic facts. The stimulus has had some positive effects, that's pretty much universally agreed on by most sane people. You can argue about weather it was too big or small, or what the longer term effects will be, but saying it hasn't had an impact is just a flat out lie.
If it worked, and you were one of the few to find a job as a result, then you are now working to pay back all the money that was borrowed for the supposed "stimulating" factor anyway.
What I don't understand is why the cost of the war is never mentioned in conversations like this. How much of our tax money is going to support the wars? How does that affect the economy?
No one ever made the poor rich by making the rich richer.
Let's go back to the Republican policies of tax cuts and deregulation and see how that works.
I am constantly hearing opposing views on this: it did work/it didn't work.
What solution, that can be seen immediately, do those who feel it didn't work think should be in play? And is seeing the growth this fast realistic???
I am a temp and am seeing much more work coming back my way than in early 2009.
Dan Gross is an Obamanomics hack.
Did it work....look around you.Christine Romer wrote that she actually believed in a 1.55 Keynesian multiplication factor. How did that work out?
No one ever made the poor rich by making the rich poor.
ok....let me just say this:
we spend 8 years digging ourselves into a gigantic ditch and people expect 2 years of obamas calm middle of the road initiatives to fix everything just like that? are we a country of 8 year olds?
Stephen Moore's assertion that because we still have some economic problems that the stimulus didn't work is simple-minded and an insult to this discussion. Dan Gross has facts and analysis to present. Could Mr. Moore please support his position with some actual analysis?
Obama and his party oversold the stimulus and practically nothing the government could do would have more significantly improved the economy by now. The right is manufacturing and manipulating discontent to continue the policies which helped get us into this mess in the first place.
the right needs to give up voodoo...
I get so tired of these people saying the stimulus didn't work but I never hear what they would have done and how that would have gotten us out of the ditch we were put in by Bush and the Republicans!
Please discuss what, if anything, we learned so that next stimulus measure will be more effective and more Americans find jobs. Since you ask for location and I am from New Jersey, please note that Christie job measures are proving less productive than Obama measures.
On the theme of government spending and Tea Party, see Matt Taibbi story in Rolling Stone. Pretty much describes TP in a way even the "folks" (what a condescending term) can understand.
If we as consumers can be swayed by POM's "scientific" research, I'm not sure we have the analytical background to say whether or not the federal stimulus worked. Seriously, it seems even the economists can't agree on this. I certainly wouldn't trust most politicians to speak knowledgably on this.
Saying the stimulus didn't work is like saying rabies vaccine doesn't work because "that mad dog still BIT ME anyway!"
Spot on, hjs11211!
I hope this "debate" isn't a predictable he said he said. But seriously there has been so much misinformation and hysteria around the stimulous since the moment it passed -- no wonder the general public has a negative view. If you look at most polls, the "opinions" expressed mostly mirror whatever narrative the mainstream media (or Fox) has been pushing.
$20 billion per year to farmers is a long term and on going federal stimulus for the farms states. it's one reason the plains states have such low unemployment rates, that and other socialism. they don't call them red states for nothing.
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