

Megan McArdle: Did the Stimulus Save Us? - cwan
http://meganmcardle.theatlantic.com/archives/2010/02/did_the_stimulus_save_us.php

======
ivankirigin
The discussion also usually doesn't focus on the fact that the costs of the
stimulus haven't been felt yet. It could just be higher taxes and higher
interest rates. But it could also be that treasury bills are no longer
purchased by foreign governments, and the shell game where the government
essentially buys its own bonds will be harder to hide. That is much more
serious problem than a crippled mortgage market. I'm looking forward to
politicians justifying debasing the currency for "national security".

~~~
forinti
I just hope that the devaluation of the dollar doesn't coincide with the
election of the first latino president. It would be funny as hell, but utterly
unfair.

~~~
ivankirigin
huh? Is that a joke about the predisposition for strong men in latin america,
who often have devalued currencies? Many, many countries have experienced
extreme inflation. Even the US in the 70s and early 80s was pretty extreme.
[http://www.usinflationcalculator.com/inflation/historical-
in...](http://www.usinflationcalculator.com/inflation/historical-inflation-
rates/)

~~~
btilly
The joke had nothing to do with strong men. Everything to do with how devalued
currencies in Latin America tend to be, and how many people in the USA are
afraid that the growing Mexican presence will bring us poverty.

------
chubbard
So if she's in favor of the stimulus, but then points out that it didn't do
anything. Why did she say she was in favor of it? If the only thing it causes
is higher inflation or taxes?

------
MaysonL
For a contrary view, see the facts:
[http://delong.typepad.com/sdj/2010/02/assessing-the-
stimulus...](http://delong.typepad.com/sdj/2010/02/assessing-the-
stimulus.html)

and:
[http://www.econbrowser.com/archives/2010/02/assessing_the_s....](http://www.econbrowser.com/archives/2010/02/assessing_the_s.html)

------
sophacles
There is something not discussed here, that I rarely see come up anywhere.
Many of the places where stimulus money is available kept workers, started new
projects, and even hired workers on the assumption that they would get
stimulus money, or on the promise of that money. The power industry is
spending lots of money, and keeping lots of workers on, based on money that is
not actually spent by the government yet. The power of the stimulus goes far
beyond the number of dollars currently spent.

For example see the large outlays lots of companies have put down on "Smart
Grid" stuff.

~~~
anamax
How about quantifying this? How much did each of these jobs cost? Do you
really think that the borrowed money wouldn't have created any jobs?

For example, we have stimulus-paid weatherization projects costing over
$50k/house. That's economically stupid. We'd have been better off just
throwing money out the window of passing cars.

~~~
sophacles
I am not an economist, nor am I an exec or anything so it is all observations
but:

1\. When we talk about joint academic/industry projects we talk about numbers
of dollars on the order of 1M and 10M not 10K and 100K.

2\. Lots of conversation from various people along the lines of "we just hired
some guys to get ready for FOA-xx" or "we picked up some guys to integrate
with the new NERC requirements" where FOA-xx describes one of the many
stimulus grants -- at the time many had not been awarded. Now that they have
been "awarded" many companies are hiring people to do the jobs. The contracts
w/ the gov't still arent signed, so this money is not actually listed as spent
yet. I am personally involved w/ a couple of these, this is how it works.

3\. Industry meetings/conferences have gotten bigger in terms of # of
attendees. Many of the people selling software are new entries to the market.

As for:

* Do you really think that the borrowed money wouldn't have created any jobs? * I have no idea what you are talking about. I never said anything about borrowed money. Which borrowed money? Sure more money may have created more jobs, but at least in the power sector, even when credit was good and easy there wasn't this level of interest and job creation.

About your last statement I totally agree: money spent on something I don't
like doesnt enter the economy, therefore cannot possibly be helping things.
(actually thats unfair, you seem like the type susceptible to poe's law so
heres a bit of help: that last sentence was sarcasm).

~~~
anamax
> 1\. When we talk about joint academic/industry projects we talk about
> numbers of dollars on the order of 1M and 10M not 10K and 100K.

Pikers. The project that I'm talking about has already spent over $500M out of
a $5B budget. <http://abcnews.go.com/print?id=9780935>

> Lots of conversation from various people along the lines of "we just hired
> some guys to get ready for FOA-xx"

Giggle. In other words, it's in the noise even for an anecdote.

We're spending around $800B so the overall effect better be massive or it's a
waste.

> * Do you really think that the borrowed money wouldn't have created any
> jobs? * I have no idea what you are talking about.

The stimulous is being funded with a combination of borrowed money and printed
money. The borrowed money came from somewhere. That somewhere is likely to
have been producing jobs as well, jobs that won't happen because the money
went into the stimulus. Unless the stimulus produces more jobs, it's a net
loss.

> but at least in the power sector, even when credit was good and easy there
> wasn't this level of interest and job creation.

Which tells us that the jobs and interest are not driven by market value but
by subsidy. In other words, you're being paid to do things that don't make
economic sense.

That brings us back to weatherizing houses for $50k a piece. Yes, someone got
a job, but do you really think that that's a reasonable way to spend money?

Or, are you arguing that "govt money" is special?

Surely you're not going to argue that money that goes into your pocket is
special....

