The Strangest Thing I Read Today

Via Scott Sumner, I find Ezra Klein considering counterfactuals about policy and the recession. However, two sentences stuck out as particularly odd:

The stimulus was a bet that we could get out of this recession through the one path everyone can agree on: growth. The bet was pretty much all-in, and it failed.

The stimulus was about growth? Not the stimulus package that I saw.

The stimulus package was a “gap-closing” policy and the emphasis seemed to be more toward preventing the loss of public sector jobs like teachers, police, and fire service — as evident by the substantial chunk of the package that was devoted to transfers to states. Now we can debate the merits of such policies until we are blue in the fact, but there was very little in the way of growth-producing policies consistent with economic theory (and that remains true if you think that the transfer payments were good policy). What precisely was pro-growth about the stimulus package? Perhaps I missed something.

5 responses to “The Strangest Thing I Read Today

  1. 37% of it was also tax breaks; everyone was getting an extra $15 dollars each paycheck; typically, most of that weekly stipend was spent at walmart, & hence only employed the chinese.

  2. These were temporary tax cuts, which economic theory suggests will be unsuccessful regardless.

  3. Josh
    The “growth” miniker was just a “packaging gimmick”. Something that every body feels happy about and can agree on!

  4. Obama doesn’t have a supply-side bone in his body.

  5. Have you ever wondered what the public goods allocation disparity would be between A) 535 congresspeople allocating other people’s money and B) millions and millions of taxpayers directly allocating their own taxes?

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