Obama's $700 Billion Stimulus: $280,000 a Job
Economist Greg Mankiw asks a good question:
"What is going on here? Logically, it must be one of three possibilities:
1. The fiscal stimulus is going to be much smaller than is being reported.
2. The new administration is setting a low bar for itself when it comes to job creation.
3. The Obama team believes in very small fiscal policy multipliers.
Let me amplify the last point. ... So let's say each job created means $100,000 of extra national income. If we are generating $100,000 of income with $280,000 of government spending, the multiplier is only 100/280, or 0.36. Traditional Keynesian models suggest a multiplier closer to 2.0.
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Reader Comments
stop the madness
are we all insane in this country? who's going to pay all that money that the current and the future administration coughing up left and right bailing out anybody and everybody. can someone please tell me that this country will survive this madness. it's like the store owner gone insane and give the store away. but the president and congress don't own the store.we, the people do
stimlus
so the figures presented are incorrect?
What's another $700 billion
It's time to slam the door on all bailouts.
Let the market work, there will be winners and losers?
Swiggy, he may only be the President Elect but the world leaders and the the world finanical markets are listening and watching everything he does, comes with the job. Do you really believe that there would be no effect on the markets if he came out and said that he was going to delay any and all tax increases until after 2010?
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