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01.29.2009 12:16 pm

Economists say stimulus won’t work

St. Louis Post-Dispatch
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Even as an $819 billion economic stimulus bill moves forward in Congress, about 200 economists have signed an advertisement saying that it won’t work. The ad, funded by the Cato Institute, starts out with a quote from Barack Obama saying that “there is no disagreement” on the need for an economic-recovery plan. It then adds:

With all due respect Mr. President, that is not true. Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today.

 The signers include some prominent names, including those of Nobel prize winners James Buchanan, Edward Prescott and Vernon Smith. Names of St. Louis interest include:

  • William Poole, former president of the Federal Reserve Bank of St. Louis
  • Michele Boldrin, David Levine and Glenn MacDonald, all of Washington University
  • John Howe of the University of Missouri-Columbia
  • Lawrence White of the University of Missouri-St. Louis
  • R.W. Hafer of Southern Illinois University-Edwardsville
  • Andrew Morriss at the University of Illinois

The ad appeared in the Wall Street Journal and New York Times.

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18 comments

Comments are closed.

what would they suggest?

— jc
1:04 pm January 29th, 2009

Can anyone explain why the Senate is plunging headlong into passing this insane piece of legislation when there is so much credible evidence against it? I can. It is because we the people have not risen up in reponse and call, written, e-mailed our representatives and the White House to Protest.

“In a democracy, the people get the government they deserve”

— tartan
1:19 pm January 29th, 2009

I wonder if these economists supported Trickle Down Economics (Tax Cuts for the Wealthy), deregulating the financial markets and exporting Americas maunfacturing and industrial base?

— morfirst
1:20 pm January 29th, 2009

Easy. Slow this run-a-way train, that is nothing more than a political stunt, down to the type of deliberate process such a HUGE decision deserves. Bring in and Listen to this opposing view and craft a thoughtful, not political course.

OB and other ‘cry wolf’ types have said the sky is falling since last October, and it has not. Nothing other than their political posturing says it will. The Federal Reserve is doing massive injections of capital into the system. Let monetary policy work.

— tartan
1:28 pm January 29th, 2009

WOW, right out of the Democrate’s talking points. Kindly read the quote that is in the article above. They do a better job at telling you who they are and do it well and without political bias

— tartan
1:32 pm January 29th, 2009

FDR’s policies did not pull the U.S.out of the depression only war(god forbid) and tax cuts have resulted in recovery in the past. Printing paper and throwing it at the problem will result in future inflation if not hyperinflation. We have nothing backing this paper and it will only put a burden on future generations. Stop spending and bite the bullet, take some pain and then we can gain.

— ozarkpops
2:34 pm January 29th, 2009

BRING IT ON!!
Let’s just cut to the chase. Mr. Government please give every U.S. citizen 18 and over a $30,000 a year living expense, free healthcare, free education, free housing, free entertainment (concerts and gladitorial games for the unwashed masses)
Those of us that wish to make more can, or just like Canada with free healthcare I can still hire my own doctor if I wish as long as I can afford. I mean do you really think that 60k a year incomes are using free healthcare? It’s all about what you can afford.

I’m very serious, why are we screwing around with this capitalism/socialism left right paradigm? Extreme Capitalism does not work because of greed and extreme Socialism does not work either (although there has never been a true socialist system, it’s always been butchered be communism and fascism)

There is more than enough money in the government, just look at all the waste already and that does not include the 2 billion a week saved in the “war on terror (I mean the war of lies and fear)”

I’m so tired of hearing right wing talk radio nutjobs squawking about how Obama is going to make us into socialist by spreading the wealth or giving free healthcare (for the record, it was Hillary that proposed free healthcare)
And I’m tired of hearing left wing nutjob bloggers believe that one man can change the world and the (fake) economic collapse.

Bailouts don’t work (just ask Paulson to tell us where the first 350 billion went) This was the biggest heist in the world. And a tax holiday won’t work because you would have revolution and blood in the streets if taxpayers were able to keep 30% of their paychecks and then Uncle Sam tried to take it away again. Some of you might already know that every penny of your income tax goes to pay the debt of the Federal Reserve. So here the Fed prints fake money buy adding zero’s to computer systems and then all of us get to pay it back with an undisclosed interest rate - it’s the most brilliant scam ever.

Watch Freedom to Fascism, wake up and get mad as hell
http://video.google.com/videoplay?docid=-1656880303867390173

— sweetness
3:11 pm January 29th, 2009

Instead of complaining about the current plan, why not come up with a plan of their own. That won’t happen because then they’d have to own it if it failed. We’re in new territory here. Cutting taxes and letting things work out on their own is not the fix-all for every problem.

— Turd Ferguson
4:40 pm January 29th, 2009

The Cato Institute, and its local junior fatcat partner: the Show-Me Institute, is nothing but a hard right wing think tank created by the super-rich corporate elite. (I like Naomi Klein’s definition, which I have paraphrased, of a think tank: comprised of hacks–like Podgursky and Poole–paid to think by the makers of tanks!) Face facts, my far right wing friends: your Ayn Rand/Milton Friedman/Reagan/Thatcher economics are in the dustbin of history. Top-down, trickle-down policies have led to EVERY major economic crisis since the arrival of laissez-faire capitalism. More recent examples include the savings and loans crisis of the 80’s, Enron(you know, the company for which Cheney-Bush’s Attorney General Gonzalez lawyered for in the early 90’s)and the current, international economic meltdown. When are you right wing sycophants going to own up and take some responsibility for your wreaking havoc on the 95% of those who are not super-rich like Rex Sinquefield, the Republican financial mastermind behind the Show-Me Institute? Have a fresh, hot cup of locally-brewed java, my friends and wake up, and more importantly, own up! At least Ted Haggard has.

— whiterosesociety
9:29 am January 30th, 2009

1ST - The Free Market is designed to reward good economic behavior and punish bad economic behavior. The current economic meltdown is not a result of Free Market failure. The Free Market is simply doing what it does best - exposing the fact that a lot of bad economic behavior exists.

2ND - The current financial crisis is the result of people and entities not paying their debt. No one forced these people and entities to take on more debt than they could afford. The banks and institutions who sold their mortgages were operating under lawful business practice.

3RD - The vast multitude of bad mortgages were those that never would have existed except for the fact that Congress FORCED the banks to create mortgages for Low Income borrowers as part of a social mission. This is equivalent to giving credit cards to children so they can dress as well as their better off peers.

4TH - The new administration and Congress are now trying to stimulate MORE spending and borrowing, which is what got us into this mess.

5TH - The $800 Billion Bill passed Wednesday night by Congress includes no more than $90 Billion in actual stimulus (12% of the total Bill) spending and only 25% of that amount occurs in 2009. The balance is nothing more than an increase in current transfer payments (food stamps, unemployment benefits, new bureaucracies, etc.) which add nothing new or stimulating to the economy.

6TH - If you’re happy with business as usual, uncontrolled spending, enlargement of government and paying off special interest constituency groups, this is your Bill. If you are serious about ending a “crisis” in our economy, this Bill achieves LESS THAN NOTHING! It will be a drag on every taxpayer and business that’s forced to fund it as they try to pay their bills and expand their business.

7TH - Life is REAL, this isn’t practice and there are no do overs. Please wake up and ask your elected representative to stop taking out an equity loan on your future income and savings - it’s your money.

— Randy Bates
10:41 am January 30th, 2009

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