Tag Archives: GDP

Give them money and they will spend

It would cost $600 billion to simply give $2,000 to each of 300,000,000 Americans. If we confined it to just those who make under half a mil, say, we’d each get a bunch more. Now that would be a stimulus by golly. Narrow it further so that all the six billion ends up in the hands of adults and we’d be beating down the barn doors in a heartbeat. Instant demand! More jobs to meet the demand! GDP up! More revenue flowing into state and federal coffers!

Spend! Work! Grow! That would work, and we’re printing money anyway . . .

Note: Dr. Black (a real economist!) at Eschaton has been advocating this novel solution for a few years now. Perhaps they should have listened to him.

US spending more as a percentage of GDP? Yup. Ummm, maybe because GDP is shrinking? Yup. But don’t tell Wolf Blitzer; it’s a little too complicated.


Not fair! That's hard.

Stuff I wish I’d thought of but didn’t:

Obama is spending way more than _____________ (choose your president/decade). This is true. Krugman ‘splains why:

The fact is that federal spending rose from 19.6% of GDP in fiscal 2007 to 23.8% of GDP in fiscal 2010. So isn’t that a huge spending spree? Well, no.

First of all, the size of a ratio depends on the denominator as well as the numerator. GDP has fallen sharply . . .

A 6 percent fall in GDP relative to trend, all by itself, would have raised the ratio of spending to GDP from 19.6 to 20.8, or about 30 percent of the actual rise.

That still leaves a rise in spending; but most of that is safety-net programs, which spend more in hard times because more people are in distress . . .

That’s another 2 points of GDP, or about half the rise.

So we’re still left with a bit, around 1 point of GDP. That’s the stimulus, more or less. And there are two things you need to know about it. First, it’s temporary, and already fading out fast. Second, a large part of the stimulus “spending” was actually aid to state and local governments, intended not to expand spending but to avert a fall — that is, it was about maintaining government, not expanding it.

Now that wasn’t hard, was it? Of course, that doesn’t change the fact that Obama’s still a commie plant, here to destroy us from within.

Actions. Consequences. No nonsense. Love Buffett.

From Political Irony, where I go when I need to lighten up:

Warren Buffett has one solution: “I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”

That’s appealing on so many levels . . .

The world’s first post-growth economy


Over at Make Wealth History there’s a post on Japan as the world’s first post-growth economy. In the eyes of economists, Japan is an economic disaster. GDP has been essentially flat since the early nineties. China’s economy outstripped Japan’s for the first time last year. “And yet”, says Jeremy:

“…the lights are still on, everything still works. Literacy is high, and crime is low. Life expectancy is better than almost anywhere on earth – 82 years to the US’ 78. The trains run to the second. Unemployment is only 5%, and levels of inequality are enviable. Real per capita income growth matches America’s at 0.7% over the past decade. It’s hardly a basket case. In fact, it is living proof that growth isn’t necessary to deliver a high standard of living.”

Even though some economists are horrified at the lack of growth, others are thinking twice. If the goal of a state is to nurture and sustain its people, Japan may not be doing so badly after all. And it may turn into a model for other countries that are hitting the wall in terms of economic growth.

Eighty three point four

While the nation once again settles in for another day of blaming the current president for the wars we’ve been engaged in for (respectively) nine years and seven and a half years,  for the perfectly fine economy he mucked up and for his failure as prophet (he promised unemployment wouldn’t go over 7%, 8%, 9%, take-your-pick) . . . here is something I know. I know that Iraq is Obama’s fault because he’s a Democrat and Iraq was their fault – or so said Dan Senor on Chris Mathews‘ tonight – and he got away with it. (Senor was the PR flack for Paul Bremmer when he was emperor of Iraq).

But about that economy thing. This is a chart that I created some time ago for another post in which I was referring to the far right column, a percentage increase in debt – by president. As I said then, taking any one of these line items alone would mean nothing. But over this period of nearly 70 years, the pattern is clear. And damning.

This time, I ask that you look at the number in the first column after Barack Obama’s name. Just look at it. It is the number he gets to start with. So look again at that number. The starting number. And weep. Obama’s economy my ass.

UPDATE: A commenter thinks the chart above explains nothing and asks ‘where are the jobs?’.  So maybe these graphs will help him see where the jobs went. GOP loses jobs, DEMS have to get them back. Old story.