Thursday, April 01, 2010

Government Stimulus

Lots of people think that government mandates create new jobs, net net. It's a key different assumption between those who think government should do more, vs. those who think they should do less. See the short video on Bastiat(2 minutes). Some great quotes by Keynesians:

"..the terror attack .. like the original day of infamy, which brought an end to the Great Depression -- could even do some economic good."
~Paul Krugman, NYT, 9/14/2001

"...economically the net result of the terrorists's actions is likely to be beneficial to the United States.'
Tim Noah, Slate, 9/12/2001

"Despite the devastation, experts said today that in some ways the earthquake [in Kobe Japan] could give a boost to an economy struggling to recover from a long recession."
Nicholas Kristof, NYT, 1/18/95

5 comments:

Anonymous said...

Doesn't bastiat ultimately depend on the multiplier of government spending at that particular time?

I am guessing that the multiplier is <1 in normal times, but >1 in certain other times (recession, depression).

I saw the bastiat video earlier and what irritated me was the pretension that there is one right policy for all economic circumstances.

gizmoduck said...

A good cartoon on crowd out:

http://cafehayek.com/2010/02/crowding-out.html

Anonymous said...

This kind of thing will very quickly destroy your credibility.

For all the fun you make of the Chicago school (e.g., Fama), you seem to parrot their ideology when it comes to macro, a subject you, like Fama, never researched.

Plamen said...

Anon, do you know what macro econ research and Hanson's "Mmm Bop" have in common? Noise.

DaveinHackensack said...

I wouldn't say 9/11 did economic good, but I wondered in a blog post a while back if it delayed an economic day of reckoning.