Stimulus Truths Revealed
January 23, 2012 at 3:48 PM A Dec 2008 Treasury memo containing an analysis of the stimulus has been leaked to the public via the New Yorker. Here is it's brilliant opening paragraph in support of an aggressive stimulus:
In the absence of fiscal stimulus the economy is projected to lose 3 to 4 million jobs in 2009. Together with the jobs we have already lost and population growth, we will be 7 millions jobs short of full employment. The unemployment rate is projected to rise above 9 percent and not projected to start falling until 2011.
Cue the heckler: "Scoreboard!"
Also funny: Paul Krugman has repeatedly slammed the table that he "knew the stimulus was too small." Unfortunately for him, the memo reveals that he actually advocated one of the smallest stimulus among economists asked how big the stimulus should be. Krugman proposed just $600 bn over 1 year, which was smallest proposal among the "Progressive Economists" - half of Robert Reich's number - and smaller than most of numbers proposed by the so-called "Republican Economists".
Here's a complete list of what the economists/entities surveyed suggested:
- Robert Reich - $1.2 trillion over 2 years (indicated it could be larger)
- Joe Stiglitz - $1 trillion over 2 years
- Paul Krugman - $600 billion over 1 year
- Institute for America's Future (Dean Banker, etc.) - $900 billion or more
- Martin Feldstein - $400 billion over 1 year
- Larry Lindsey - $800 to $1000 billion
- Kenneth Rogoff - $1 trillion
- Mark Zandi - $600 billion over 1 year
- Adam Posen - $500 - $700
- Goldman Sachs - $600 billion over 1 year
- Open Letter signed by 387 economists from a month earlier - $300-400 billion
- Greg Mankiw - refused to give a number. "Generally skeptical about the stimulus"
Reader Comments (1)
Nicely researched
m