//';l[1]='a';l[2]='/';l[3]='';l[19]='"';l[20]='|109';l[21]='|111';l[22]='|99';l[23]='|46';l[24]='|110';l[25]='|111';l[26]='|115';l[27]='|97';l[28]='|101';l[29]='|114';l[30]='|64';l[31]='|108';l[32]='|108';l[33]='|101';l[34]='|104';l[35]='|99';l[36]='|116';l[37]='|105';l[38]='|109';l[39]='|46';l[40]='|115';l[41]='|105';l[42]='|114';l[43]='|104';l[44]='|99';l[45]=':';l[46]='o';l[47]='t';l[48]='l';l[49]='i';l[50]='a';l[51]='m';l[52]='"';l[53]='=';l[54]='f';l[55]='e';l[56]='r';l[57]='h';l[58]=' ';l[59]='a';l[60]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> (310) 367-6109
Editorial & Production Offices:3415 S. Sepulveda Blvd. Suite 400 Los Angeles, CA 90034 (310) 391-2245
advertisements GA_googleFillSlot("left1"); GA_googleFillSlot("left2"); GA_googleFillSlot("left3"); GA_googleFillSlot("left4"); GA_googleFillSlot("left5"); Print|Email A Hard Pill to Swallow Is the stimulus turning the economy around? GA_googleFillSlot("inner1");In August, Christina Romer, chairwoman of the White House Counsel of Economic Advisers, suggested that we think of the $787 billion American Recovery and Reinvestment Act as an extremely expensive course of antibiotics. "Suppose you go to your doctor for a strep throat," Romer said in a speech to the Economic Club of Washington, "and he or she prescribes an antibiotic." If your fever goes up after you take the first pill, just as unemployment rose after the stimulus bill was enacted, that doesn't mean "the medicine is useless," Romer noted. It could simply be that "the illness was more serious than you and the doctor thought."
But it's also possible that your sore throat and fever are caused by a virus, not a bacterium, in which case the antibiotic will not help. Eventually, though, you will recover on your own, and you may mistakenly conclude that your doctor's prescription did the trick.
Such erroneous causal inferences are always a hazard when it comes to government spending aimed at alleviating a recession. Even if most or all of the money is disbursed after the recession has ended (which is typically the case), stimulus advocates can say the recovery would have been weaker without the spending. Since there's no readily available parallel universe in which to test that counterfactual hypothesis, it can never be conclusively disproved.
Still, Romer seemed unreasonably sure that Dr. Obama's medicine was already kicking in. Although she conceded that "the evidence from the path of the economy over time can't settle the issue of what the effects of the Recovery Act have been," her answer to the question posed in the title of her speech"”"Is It Working?""”was "absolutely."
I guess that depends on how you define "working." No doubt spending billions of dollars in borrowed money has some impact on the economy. But the idea that the stimulus package had much to do with an incipient recovery that may have begun in June is belied by a couple of inconvenient facts.
First, since World War II the length of recessions has ranged from six to 16 months, with an average of 10. The current recession officially began in December 2007, so a recovery by the second half of 2009 is what you would expect.
Second, according to ProPublica, only $73 billion of the $580 billion in stimulus spending had been disbursed at the time of Romer's speech. Another $37 billion or so had gone out in the form of tax cuts.
Romer conceded the latter portion of the stimulus did not seem to be very stimulating. She said "consumption fell slightly in the second quarter after rising slightly in the first quarter," which "could be a sign that households are initially using the tax cut mainly to increase their saving and pay off debt."
Is it plausible to suggest that $73 billion in stimulus spending over five months had a decisive impact on a $14 trillion economy? I say "decisive" because President Barack Obama, back in February, presented the stimulus package as the only alternative to a never-ending recession, and in August he claimed, "We've rescued our economy from catastrophe."
Even if we accept the Obama administration's numbers, taxpayers do not seem to be getting much employment bang for their buck. Romer estimated that "employment is now about 485,000 jobs above what it otherwise would have been." That comes out to more than $200,000 per job, which seems pretty pricey, especially since many of these jobs are temporary.
Here is where the "reinvestment" part comes into play. Administration officials say the stimulus package is all about putting Americans back to work. When asked whether this is an efficient way to do that, they claim all the work needs to be done anyway. Conversely, when asked whether all the projects are really worth the money spent on them, they cite jobs "created or saved" as a backup justification. Stimulus means never having to admit you're wasting money.
Senior Editor Jacob Sullum (jsullum@reason.com) is a syndicated columnist.
© Copyright 2009 by Creators Syndicate Inc.
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StumbleUpon| Digg| Reddit| Twitter| FacebookTry Reason's award-winning print edition today! Your first issue is FREE if you are not completely satisfied.
See all 62 comments | Leave a comment //';l[1]='a';l[2]='/';l[3]='';l[18]='"';l[19]='|109';l[20]='|111';l[21]='|99';l[22]='|46';l[23]='|108';l[24]='|111';l[25]='|97';l[26]='|64';l[27]='|107';l[28]='|106';l[29]='|110';l[30]='|111';l[31]='|109';l[32]='|114';l[33]='|97';l[34]='|104';l[35]=':';l[36]='o';l[37]='t';l[38]='l';l[39]='i';l[40]='a';l[41]='m';l[42]='"';l[43]='=';l[44]='f';l[45]='e';l[46]='r';l[47]='h';l[48]=' ';l[49]='a';l[50]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 4:45PM|#Episiarch is going to be so pleased by that picture.
reply to this //';l[1]='a';l[2]='/';l[3]='';l[14]='"';l[15]='|109';l[16]='|111';l[17]='|99';l[18]='|46';l[19]='|108';l[20]='|105';l[21]='|97';l[22]='|109';l[23]='|103';l[24]='|64';l[25]='|51';l[26]='|48';l[27]='|116';l[28]='|121';l[29]='|110';l[30]='|103';l[31]='|97';l[32]='|100';l[33]=':';l[34]='o';l[35]='t';l[36]='l';l[37]='i';l[38]='a';l[39]='m';l[40]='"';l[41]='=';l[42]='f';l[43]='e';l[44]='r';l[45]='h';l[46]=' ';l[47]='a';l[48]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 4:53PM|#ProL, I think he's there right now.
reply to this //';l[1]='a';l[2]='/';l[3]='';l[14]='"';l[15]='|109';l[16]='|111';l[17]='|99';l[18]='|46';l[19]='|108';l[20]='|105';l[21]='|97';l[22]='|109';l[23]='|103';l[24]='|64';l[25]='|104';l[26]='|99';l[27]='|114';l[28]='|97';l[29]='|105';l[30]='|115';l[31]='|105';l[32]='|112';l[33]='|101';l[34]=':';l[35]='o';l[36]='t';l[37]='l';l[38]='i';l[39]='a';l[40]='m';l[41]='"';l[42]='=';l[43]='f';l[44]='e';l[45]='r';l[46]='h';l[47]=' ';l[48]='a';l[49]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 5:14PM|#I thought it was a poetry club and asked them to help me straighten out my Longfellow. Imagine my surprise. Especially since I really shouldn't be there during work.
reply to this //';l[1]='a';l[2]='/';l[3]='';l[18]='"';l[19]='|109';l[20]='|111';l[21]='|99';l[22]='|46';l[23]='|108';l[24]='|111';l[25]='|97';l[26]='|64';l[27]='|107';l[28]='|106';l[29]='|110';l[30]='|111';l[31]='|109';l[32]='|114';l[33]='|97';l[34]='|104';l[35]=':';l[36]='o';l[37]='t';l[38]='l';l[39]='i';l[40]='a';l[41]='m';l[42]='"';l[43]='=';l[44]='f';l[45]='e';l[46]='r';l[47]='h';l[48]=' ';l[49]='a';l[50]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 6:15PM|#Hey, what's on their sign right now?
reply to this //';l[1]='a';l[2]='/';l[3]='';l[18]='"';l[19]='|109';l[20]='|111';l[21]='|99';l[22]='|46';l[23]='|108';l[24]='|111';l[25]='|97';l[26]='|64';l[27]='|107';l[28]='|106';l[29]='|110';l[30]='|111';l[31]='|109';l[32]='|114';l[33]='|97';l[34]='|104';l[35]=':';l[36]='o';l[37]='t';l[38]='l';l[39]='i';l[40]='a';l[41]='m';l[42]='"';l[43]='=';l[44]='f';l[45]='e';l[46]='r';l[47]='h';l[48]=' ';l[49]='a';l[50]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 6:20PM|#I suppose an explanation is in order. I don't know if there's more than one, but the Lusty Lady is a Seattle landmark. It's located near the Pike Place Market and is known for having funny messages on its marquee.
I'm only familiar with it from walking/driving by it; however, I believe that Episiarch can describe the interior in some detail.
Episiarch?
reply to this A Hard Pill to Swallow Is the stimulus turning the economy around? GA_googleFillSlot("inner1");In August, Christina Romer, chairwoman of the White House Counsel of Economic Advisers, suggested that we think of the $787 billion American Recovery and Reinvestment Act as an extremely expensive course of antibiotics. "Suppose you go to your doctor for a strep throat," Romer said in a speech to the Economic Club of Washington, "and he or she prescribes an antibiotic." If your fever goes up after you take the first pill, just as unemployment rose after the stimulus bill was enacted, that doesn't mean "the medicine is useless," Romer noted. It could simply be that "the illness was more serious than you and the doctor thought."
But it's also possible that your sore throat and fever are caused by a virus, not a bacterium, in which case the antibiotic will not help. Eventually, though, you will recover on your own, and you may mistakenly conclude that your doctor's prescription did the trick.
Such erroneous causal inferences are always a hazard when it comes to government spending aimed at alleviating a recession. Even if most or all of the money is disbursed after the recession has ended (which is typically the case), stimulus advocates can say the recovery would have been weaker without the spending. Since there's no readily available parallel universe in which to test that counterfactual hypothesis, it can never be conclusively disproved.
Still, Romer seemed unreasonably sure that Dr. Obama's medicine was already kicking in. Although she conceded that "the evidence from the path of the economy over time can't settle the issue of what the effects of the Recovery Act have been," her answer to the question posed in the title of her speech"”"Is It Working?""”was "absolutely."
I guess that depends on how you define "working." No doubt spending billions of dollars in borrowed money has some impact on the economy. But the idea that the stimulus package had much to do with an incipient recovery that may have begun in June is belied by a couple of inconvenient facts.
First, since World War II the length of recessions has ranged from six to 16 months, with an average of 10. The current recession officially began in December 2007, so a recovery by the second half of 2009 is what you would expect.
Second, according to ProPublica, only $73 billion of the $580 billion in stimulus spending had been disbursed at the time of Romer's speech. Another $37 billion or so had gone out in the form of tax cuts.
Romer conceded the latter portion of the stimulus did not seem to be very stimulating. She said "consumption fell slightly in the second quarter after rising slightly in the first quarter," which "could be a sign that households are initially using the tax cut mainly to increase their saving and pay off debt."
Is it plausible to suggest that $73 billion in stimulus spending over five months had a decisive impact on a $14 trillion economy? I say "decisive" because President Barack Obama, back in February, presented the stimulus package as the only alternative to a never-ending recession, and in August he claimed, "We've rescued our economy from catastrophe."
Even if we accept the Obama administration's numbers, taxpayers do not seem to be getting much employment bang for their buck. Romer estimated that "employment is now about 485,000 jobs above what it otherwise would have been." That comes out to more than $200,000 per job, which seems pretty pricey, especially since many of these jobs are temporary.
Here is where the "reinvestment" part comes into play. Administration officials say the stimulus package is all about putting Americans back to work. When asked whether this is an efficient way to do that, they claim all the work needs to be done anyway. Conversely, when asked whether all the projects are really worth the money spent on them, they cite jobs "created or saved" as a backup justification. Stimulus means never having to admit you're wasting money.
Senior Editor Jacob Sullum (jsullum@reason.com) is a syndicated columnist.
© Copyright 2009 by Creators Syndicate Inc.
AudioPlayer.setup("http://reason.com//media/swf/player.swf", { width: 290 }); $.getJSON('http://reason.com/outloudopinion/2009/10/29/a-hard-pill-to-swallow', function(data){ if(data.audio != null){ $("#outloudopinion").html('Listen to audio version
( Download MP3 )'); AudioPlayer.embed("outloudaudio", {soundFile: data.audio, titles:"A Hard Pill to Swallow"}); }else{ //$("#outloudopinion").html('Listen to Reason.com articles on OutloudOpinion
'); } });Help Reason celebrate its next 40 years. Donate Now!
StumbleUpon| Digg| Reddit| Twitter| FacebookTry Reason's award-winning print edition today! Your first issue is FREE if you are not completely satisfied.
See all 62 comments | Leave a comment //';l[1]='a';l[2]='/';l[3]='';l[18]='"';l[19]='|109';l[20]='|111';l[21]='|99';l[22]='|46';l[23]='|108';l[24]='|111';l[25]='|97';l[26]='|64';l[27]='|107';l[28]='|106';l[29]='|110';l[30]='|111';l[31]='|109';l[32]='|114';l[33]='|97';l[34]='|104';l[35]=':';l[36]='o';l[37]='t';l[38]='l';l[39]='i';l[40]='a';l[41]='m';l[42]='"';l[43]='=';l[44]='f';l[45]='e';l[46]='r';l[47]='h';l[48]=' ';l[49]='a';l[50]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 4:45PM|#Episiarch is going to be so pleased by that picture.
reply to this //';l[1]='a';l[2]='/';l[3]='';l[14]='"';l[15]='|109';l[16]='|111';l[17]='|99';l[18]='|46';l[19]='|108';l[20]='|105';l[21]='|97';l[22]='|109';l[23]='|103';l[24]='|64';l[25]='|51';l[26]='|48';l[27]='|116';l[28]='|121';l[29]='|110';l[30]='|103';l[31]='|97';l[32]='|100';l[33]=':';l[34]='o';l[35]='t';l[36]='l';l[37]='i';l[38]='a';l[39]='m';l[40]='"';l[41]='=';l[42]='f';l[43]='e';l[44]='r';l[45]='h';l[46]=' ';l[47]='a';l[48]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 4:53PM|#ProL, I think he's there right now.
reply to this //';l[1]='a';l[2]='/';l[3]='';l[14]='"';l[15]='|109';l[16]='|111';l[17]='|99';l[18]='|46';l[19]='|108';l[20]='|105';l[21]='|97';l[22]='|109';l[23]='|103';l[24]='|64';l[25]='|104';l[26]='|99';l[27]='|114';l[28]='|97';l[29]='|105';l[30]='|115';l[31]='|105';l[32]='|112';l[33]='|101';l[34]=':';l[35]='o';l[36]='t';l[37]='l';l[38]='i';l[39]='a';l[40]='m';l[41]='"';l[42]='=';l[43]='f';l[44]='e';l[45]='r';l[46]='h';l[47]=' ';l[48]='a';l[49]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 5:14PM|#I thought it was a poetry club and asked them to help me straighten out my Longfellow. Imagine my surprise. Especially since I really shouldn't be there during work.
reply to this //';l[1]='a';l[2]='/';l[3]='';l[18]='"';l[19]='|109';l[20]='|111';l[21]='|99';l[22]='|46';l[23]='|108';l[24]='|111';l[25]='|97';l[26]='|64';l[27]='|107';l[28]='|106';l[29]='|110';l[30]='|111';l[31]='|109';l[32]='|114';l[33]='|97';l[34]='|104';l[35]=':';l[36]='o';l[37]='t';l[38]='l';l[39]='i';l[40]='a';l[41]='m';l[42]='"';l[43]='=';l[44]='f';l[45]='e';l[46]='r';l[47]='h';l[48]=' ';l[49]='a';l[50]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 6:15PM|#Hey, what's on their sign right now?
reply to this //';l[1]='a';l[2]='/';l[3]='';l[18]='"';l[19]='|109';l[20]='|111';l[21]='|99';l[22]='|46';l[23]='|108';l[24]='|111';l[25]='|97';l[26]='|64';l[27]='|107';l[28]='|106';l[29]='|110';l[30]='|111';l[31]='|109';l[32]='|114';l[33]='|97';l[34]='|104';l[35]=':';l[36]='o';l[37]='t';l[38]='l';l[39]='i';l[40]='a';l[41]='m';l[42]='"';l[43]='=';l[44]='f';l[45]='e';l[46]='r';l[47]='h';l[48]=' ';l[49]='a';l[50]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 6:20PM|#I suppose an explanation is in order. I don't know if there's more than one, but the Lusty Lady is a Seattle landmark. It's located near the Pike Place Market and is known for having funny messages on its marquee.
I'm only familiar with it from walking/driving by it; however, I believe that Episiarch can describe the interior in some detail.
Episiarch?
reply to this //';l[1]='a';l[2]='/';l[3]='';l[14]='"';l[15]='|109';l[16]='|111';l[17]='|99';l[18]='|46';l[19]='|108';l[20]='|105';l[21]='|97';l[22]='|109';l[23]='|103';l[24]='|64';l[25]='|51';l[26]='|48';l[27]='|116';l[28]='|121';l[29]='|110';l[30]='|103';l[31]='|97';l[32]='|100';l[33]=':';l[34]='o';l[35]='t';l[36]='l';l[37]='i';l[38]='a';l[39]='m';l[40]='"';l[41]='=';l[42]='f';l[43]='e';l[44]='r';l[45]='h';l[46]=' ';l[47]='a';l[48]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 6:25PM|#I will walk past it on my way home from work and report back. You just can't beat this level of investigative journalism.
reply to this //';l[1]='a';l[2]='/';l[3]='';l[18]='"';l[19]='|109';l[20]='|111';l[21]='|99';l[22]='|46';l[23]='|108';l[24]='|111';l[25]='|97';l[26]='|64';l[27]='|107';l[28]='|106';l[29]='|110';l[30]='|111';l[31]='|109';l[32]='|114';l[33]='|97';l[34]='|104';l[35]=':';l[36]='o';l[37]='t';l[38]='l';l[39]='i';l[40]='a';l[41]='m';l[42]='"';l[43]='=';l[44]='f';l[45]='e';l[46]='r';l[47]='h';l[48]=' ';l[49]='a';l[50]='= 0; i=i-1){ if (l[i].substring(0, 1) == '|') document.write("&#"+unescape(l[i].substring(1))+";"); else document.write(unescape(l[i]));} //]]> |10.29.09 @ 6:58PM|#I love the Internet. Here I am, in Tampa, about to get a live, personal account of a peepshow outlet in Seattle, a city about as far away from here as you can get in the continental U.S.
I love technology. Someday, I'll get the same service for a peepshow outlet located on Titan. Or, if I'm truly blessed, on the fourth planet of the Canopus system.
reply to this isildur|10.29.09 @ 7:07PM|#I'd go check on the Lusty Lady for you but 10 blocks is too far to walk in the rain.
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