tag:blogger.com,1999:blog-17232051.post4654893869863631222..comments2024-03-18T07:04:18.975-04:00Comments on Noahpinion: Why the multiplier doesn't matterNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger106125tag:blogger.com,1999:blog-17232051.post-11523046048954798402013-01-13T22:27:15.867-05:002013-01-13T22:27:15.867-05:00Kent, you're also wrong about the gas tax. $4...Kent, you're also wrong about the gas tax. $40 billion has been taken from the federal General Fund for highways in the last couple of years, because the gas tax wasn't enough to cover the maintenance of the federal highway system.<br /><br />(The federal highway system is in fact oversized. Urban expressways have proven to be really horrible for cities, but are very very expensive to maintain -- a few dozen teardowns and we might have a sustainable system.)Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-4237000760627836512013-01-13T22:25:00.814-05:002013-01-13T22:25:00.814-05:00Mr. Machina, we routinely get people voting for pa...Mr. Machina, we routinely get people voting for parliamentary majorities for necessary infrastructure spending. 51% of voters in the US voted for Democrats in the House of Representatives.<br /><br />Unfortunately, we don't have a parliamentary system. We have a dysfunctional mess of a government which is going to collapse if it isn't made more democratic. Gerrymandering, malapportioned Senate, "filibuster" bogusness, Electoral College, first-past-the-post leading via Duverger's Law to a two-party system, etc etc etc.<br /><br />If we had the electoral system of Germany, we'd have a better government already. The Green Party representatives would be making sure of it.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-84322735087871764242013-01-13T22:22:16.367-05:002013-01-13T22:22:16.367-05:00Greg, the elite's nannies and butlers and lawn...Greg, the elite's nannies and butlers and lawn maintenance workers need to be able to get to work.<br /><br />Of course the elite does not think about such things as they fly in their private helicopters. But they SHOULD think about such things.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-64108433685209913792013-01-13T22:20:27.925-05:002013-01-13T22:20:27.925-05:00There probably are too many road lanes -- if you l...There probably are too many road lanes -- if you look at the urbanist and planning blogs, they complain about dangerous and unnecessary STROADS.<br /><br />But there definitely aren't enough railroad tracks. And there definitely aren't enough sidewalks. And there definitely isn't enough public transportation. And there definitely isn't enough money going into maintaining ordinary city streets -- or railroads of any sort.<br /><br />Perhaps we have too much heavy-infrastructure sewage system material -- but only because we don't have enough "green/blue" infrastructure, wetlands and swales and so forth.Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-82766980009556038182013-01-13T22:15:39.773-05:002013-01-13T22:15:39.773-05:00The thing which I immediately notice in this post ...The thing which I immediately notice in this post is the photo.<br /><br />Look at the high quality and standard of that *brick* road.<br /><br />Why did we pour oil-based asphalt over it again? Seems like removing the asphalt would be an improvement at this point.<br /><br />There seems to have been a bias towards *non-durable* infrastructure choices in recent years. What's up with that? Can we stop it?Nathanaelnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-71169167469826083972013-01-11T18:11:22.512-05:002013-01-11T18:11:22.512-05:00@CA Your argument is bogus since you argue for mor...@CA Your argument is bogus since you argue for more austerity measurements for Greece for their structural deficits while completely ignoring the fact that the US also had structural deficit problems before the crisis due to the Bush tax and our warmongering. <br /><br />However, due to the shadow banking crashing the global economy, deficits increased as tax receipts dried up. <br /><br />You claim that people need to suck it up and pay off their debt. <br /><br />I don't care if Greece has to cut spending on some programs. I was never against cutting spending on some places. However, I am against austerity hawks who claim that we have a deficit problem over an unemployment problem.I Hate Onionshttps://www.blogger.com/profile/14518370034972619985noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-22781258496571037732013-01-11T06:20:35.087-05:002013-01-11T06:20:35.087-05:00Hi, I thought of taking a different approach. In ...Hi, I thought of taking a different approach. In the UK we have had Keynesians, Friedmanites and all sorts running the economy since the Second World War. So I asked the question "does public spending increase the private sector part of GDP?". Does it actually work? What I found surprised me. Increasing public sector spending seems to be bad whenever it exceeds private sector growth. Take a look at the graphs in the following link:<br /><br />http://pol-check.blogspot.co.uk/2013/01/can-increased-public-spending-end.html<br /><br />Any comments?Johnhttps://www.blogger.com/profile/07442010719863995872noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-32710865149568354552013-01-10T13:33:57.313-05:002013-01-10T13:33:57.313-05:00Forgive me for introducing some real numbers from ...Forgive me for introducing some real numbers from an actual case into the debate. The 2007 Minneapolis I-35W bridge collapse was a tragedy, killing 13 people and injuring 145. Originally built in 67, the 4 lane bridge had a 50 year life span based on a loading of 66,000 vehicles per day. It only lasted 40, and the shoulders had been eliminated, adding two lanes to permit 141,000 vehicles per day use. <br /><br />NTSB said that added weight and use contributed to the collapse. Design inadequacies in the original bridge were also a factor. (maybe bad engineering, but perhaps upgrading on the cheap.) Read the NTSB report before blaming them) In 1990, the federal government gave the I-35W bridge a rating of "structurally deficient," citing significant corrosion in its bearings. Subsequent inspections noted cracking and fatigue problems. Approximately 75,000 other U.S. bridges had this classification in 2007. Gov Tim Pawlenty said the bridge was scheduled to be replaced in 2020.<br /><br />Costs: $400,00 per day to highway users from time/fuel costs with detours, $60 million to the State's economic output. http://www.dot.state.mn.us/i35wbridge/rebuild/municipal-consent/economic-impact.pdf Stores and malls served by the bridge lost up to 40% of sales.<br /><br />The replacement bridge cost $235 million and federal disaster relief another $5 million, and other disaster related expenses. <br /><br />If you want a good place to start Noah's spending binge, NTSB identified 700 major bridges with similar design and structural life issues. <br /><br />JRHullshttp://somewhatlogically.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-50386621890379481002013-01-10T12:37:12.908-05:002013-01-10T12:37:12.908-05:00Ha! We have a spammer qua Chauncy Gardener invokin...Ha! We have a spammer qua Chauncy Gardener invoking the hydraulic metaphor!Steve Rothhttps://www.blogger.com/profile/11895481216028771016noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-11117774267072158862013-01-10T11:23:31.796-05:002013-01-10T11:23:31.796-05:00Plumbing plays very important role in healthy home...Plumbing plays very important role in healthy home. Once the foundation built, a plumber runs all the water supply lines to the home where sinks, bathtubs, showers and other fixtures will be installed.<a href="http://needaplumberperth.com" rel="nofollow">Plumbing services</a> are very necessary to keep your home safe and healthy.Anonymoushttps://www.blogger.com/profile/15885848406906835977noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-78290438483405961752013-01-10T10:51:49.221-05:002013-01-10T10:51:49.221-05:00@RE OK, we largely agree, though timing the tax hi...@RE OK, we largely agree, though timing the tax hikes so as ot to hurt the recovery is important!<br /><br />@IHO I am not sure what is my bogus and/or silly argument is. First of all, the U.S. certainly did not have a debt problem before the crisis. Its debt to GDP ratio was relatively modest, given also its ability to print its own currency. This is very different from Greece. Second, a country that has a debt problem needs to address it. But I never said that they should do so by laying off teachers or not investing in infrastructure. This is also not what Greece has done, largely because some of its infrastructiral investment is funded by the E.U . But eventually they have to cut from somewhere, and find ways to raise revenue. This is indisputable! CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-73988813826578144612013-01-10T06:40:27.208-05:002013-01-10T06:40:27.208-05:00@CA / IHO
First, I should say that I am British, ...@CA / IHO<br /><br />First, I should say that I am British, so my points are general rather than referring to the USA in particular.<br /><br />I am afraid that I do expect that this will be a very long-lived slump. Partly because it is a post-financial crisis slump, and I think that there are bad assets left that are deterring new "investment" in the widest sense of that word, as in Japan. And partly because I think that the financial boom and bust overlays a deep competitiveness problem versus the rest of the world. I would be wary of making policy on the assumption that a strong recovery is just a matter of time.<br /><br />"Does that mean we should fire teachers and not invest into infrastructure?" No, you are not reading what I am writing; I am saying that TAXATION SHOULD BE RAISED to allow increased investment without cutting vital current expenditure. You might be confused because my views are unusual - they might be described as hard money socialism. I believe in honest redistribution (ie not stealth redistibution by inflation, which tends to hit relatively poor savers) to mitigate present suffering, and structural change to restore growth.RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-64567578793488579042013-01-09T21:27:57.778-05:002013-01-09T21:27:57.778-05:00I would say it's clear that the current state ...I would say it's clear that the current state of our economy indicates that a massive spending binge is in order.Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-85951235824962466332013-01-09T21:06:35.835-05:002013-01-09T21:06:35.835-05:00CA - Right, it is a complicated calculation. Infr...CA - Right, it is a complicated calculation. Infrastructure costs a lot (usually more than original estimates), has positive but uncertain benefits, is ultimately financed by taxes, which have high and uncertain costs, and is temporarily financed with debt, the costs of which depend on interest rates. Lots of interest groups benefit or are hurt by each aspect of this calculation.<br /><br />It isn't obvious whether we are spending too much or too little, and given the incentives interested parties have to distort the facts, we might never know.<br /><br />What is the correct policy? I would say caution. Don't go on massive spending binges, but don't make massive cuts either. Privatize whenever possible in order to obtain market signals about optimal investment and pricing.David Barkerhttps://www.blogger.com/profile/17243910374364993035noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-79890460566716864942013-01-09T20:46:23.162-05:002013-01-09T20:46:23.162-05:00@CA While I agree with you on your first point, yo...@CA While I agree with you on your first point, you can blame the Austerians for slashing public employment and not properly investing into America right now. <br /><br />Spending on goods and services is down and public employment has shed hundreds of thousands of jobs. Most states have balance budget laws. Therefore, without aid of the federal government, they had to lay off public employees since tax revenues dried up due to an economic crisis outside of their control. While tax revenues dried up largely due to the shadow banking industry crashing the global economy (According to Austerians, the shadow banking was supposed to regulate itself since markets are efficient), they lost their jobs while Wall St. made out like a bandit while borrowing billions below market interest rates. <br /><br />As for Europe, the evidence is in. Austerity measurements are not helping. In fact, it is prolonging recovery and even making the debt less manageable to handle due to anemic growth. <br /><br />While Greece had some serious structural problems before with their debt, it wasn't totally unmanageable, but the Euro and the financial crisis made it all more great. <br /><br />Plus, your argument is completely bogus. America had a debt problem before the crisis, and a good chunk of it was structurally driven by the Bush tax cuts and our warmongering. <br /><br />Does that mean we should fire teachers and not invest into infrastructure? What a silly argument. I Hate Onionshttps://www.blogger.com/profile/14518370034972619985noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-31647525032966138452013-01-09T20:34:45.262-05:002013-01-09T20:34:45.262-05:00@RE I didn't open up the link since NYTimes o...@RE I didn't open up the link since NYTimes only allows 10 visits per month and I am not a subscriber. Therefore, I have no idea what point you are trying to make. Perhaps you want to expand on your expressions....<br /><br />I want structural change also, such as fixing our exorbitantly high medical costs, the erosion of the middle class, the increased job polarization, our shortsighted trade agreements, and the divergence between compensation and productivity. <br /><br />Plus, most of our debt is cyclical, not structural. While I am all for structural solutions, they should not be used to address our cyclical problems. I Hate Onionshttps://www.blogger.com/profile/14518370034972619985noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-27056405963680273902013-01-09T19:12:29.286-05:002013-01-09T19:12:29.286-05:00You don't have to believe the ASCE, but to dis...You don't have to believe the ASCE, but to dismiss their data without specifying where and by how much it is wrong is simply an ad hominem argument that lends nothing to arriving at real understanding. One can compare the ASCE recommendations with that of the DOT/FTA reports, Status of the Nations Highways, Bridges and Transit: Conditions and Performance. http://www.fta.dot.gov/about/about_FTA_5208.html Much of the data in these reports comes from physical evaluation of specific bridges and highways. Generally it follows reasonably closely the ASCE position.<br /><br />But of course, much of the work was done by engineers, albeit working for State and Federal agencies, but we know what liars engineers are, and they cheat by using actual data. <br /><br />And airline hubs are a creation of the airlines...for their benefit. Remember that when Reagan fired all the controllers, they were forced to reduce flights to be able to manage the runway real estate with limited approach control personnel. Runway capacity is the real restriction on air traffic. The system runs so close to capacity, that severe weather anywhere in the national system causes cascading delays, especially in the North East. See the Atlantic article, "Slam and Jam" by famed journalist (and pilot) William Langeweische, http://www.theatlantic.com/magazine/archive/1997/10/slam-and-jam/305134/ (Quiz: When was the last new runway system build for a major metropolitan area, and how much did deregulation increase the number of take-offs and landings?)<br /><br />Uninformed arguments can't lead to workable solutions.JRHullshttp://somewhatlogically.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-42758020462484296112013-01-09T18:40:32.150-05:002013-01-09T18:40:32.150-05:00Rebel, do you really want me to forecast when the ...Rebel, do you really want me to forecast when the boom will come? Or are you implying that this is a permanent slump? Recessions are followed by periods of expansion, this is one of the stylized facts of business cycles. <br /><br />Laying off teachers and firefighters because of a shortfall in taxes and hiring them back when finances improve is just not good policy! This has nothing to do with Keynesian multipliers. The surplus during the last boom went to tax cuts, two wars, and paying for Medicare. Are you really saying that we should cut essential public services to pay for these policies because restoring tax rates, reducing our military engagements, and fixing Medicare are not politically feasible? If you wouldn't do that during goods times, it makes no sense to do it now.CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-46555455717916556982013-01-09T17:10:04.906-05:002013-01-09T17:10:04.906-05:00@IHO eg here: http://krugman.blogs.nytimes.com/201...@IHO eg here: http://krugman.blogs.nytimes.com/2012/04/24/austerity-and-growth-again-wonkish/ "one euro of austerity yields only about 0.4 euros of reduced deficit"<br /><br />As I say, I do not deny the suffering, but want it addressed by real, structural measures like tax shifting, not by giving up trying to reduce the debt.<br /><br />@CA, when is the boom coming (and note IHO's remark about what happened to the surplus during the last boom - politicians will never tackle debt until they have no choice)?RebelEconomisthttps://www.blogger.com/profile/13241098878248190971noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-41850121530746199072013-01-09T12:50:42.663-05:002013-01-09T12:50:42.663-05:00Austerity during recessions is a bad idea regardle...Austerity during recessions is a bad idea regardless of whether you are Keynesian or not. If public services (schooling, law enforcement, etc.) are worth providing in the long run you do not want to cut them down simply because your tax revenue went down. You borrow the difference during the recession and pay it off during the boom. It is called smoothing, and private households do it also.<br /><br />Greece is a different story. They had a debt problem even prior to the recession. Instead of dealing with it during the "good" times, when it would have been relatively less painful, they ended up having to do it in the midst of a global recession. This is the problem.CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-68063125137344686012013-01-09T12:40:28.355-05:002013-01-09T12:40:28.355-05:00David, if it is timing we are talking about then g...David, if it is timing we are talking about then greater infrustrucural investment need not result in higher taxes. We can spend today more and make it up by not having to spend in the future. You are also ignoring the productivity impact of such investment. If GDP rises (e.g. because employees are not stuck for hours in traffic and can instead spend more hours working or are more productive during those hours) you can cover the investment by an increase in the tax base rather than in tax rates.CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-81651908558902517212013-01-09T11:38:07.921-05:002013-01-09T11:38:07.921-05:00I am highly skeptical of your claim that Krugman&#...I am highly skeptical of your claim that Krugman's own models show that austerity works during times like these. Plus, you say austerity works, then in your next line of thought, you claim that it is horrible. <br /><br />The best way to tackle our debt is for a strong and robust recovery. This will increase inflationary pressures, but this is besides the point. A strong economy has higher tax receipts and less need to spend. As long as GDP grows faster than debt, then debt is really not a problem. <br /><br />You make another mistake by putting a future speculative problem before an actual real problem. If we continue on our current trajectory, debt will be a problem, but it is best solved by growth. This is completely speculative since the future is uncertain. For example, the Bush tax cuts were enacted because Greenspan and Republicans thought we would pay off our debt and have too much idle money sitting in the public sector. What did the future bring?<br /><br />Plus, you completely ignore the present problem which is real. We have an unemployment problem and a weak economy in which millions are unnecessarily suffering. <br /><br />Why place a future speculative problem before a current actual problem?I Hate Onionshttps://www.blogger.com/profile/14518370034972619985noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-53098682756465030142013-01-08T23:57:36.384-05:002013-01-08T23:57:36.384-05:00In fairness, based on current figures, if you dras...In fairness, based on current figures, if you drastically reduce the amount of miles of road to the point that you have sufficient funds to maintain and eventually replace them, you might hit a steady state. But then again, this approach might reduce transportation efficiency to the point that it impacts economic efficiency and thus tax revenues....JRHullshttp://somewhatlogically.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-85527892429338116002013-01-08T23:52:55.103-05:002013-01-08T23:52:55.103-05:00No oscillations or steady state road quality...giv...No oscillations or steady state road quality...given declining expenditures over time, you just hit the point where the bridge collapses (or has to be closed) and the road becomes impassable. (See Univ. Minnesota link in my earlier response)JRHullshttp://somewhatlogically.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-53787908309529858572013-01-08T23:29:39.483-05:002013-01-08T23:29:39.483-05:00So I guess it really does come down to how much we...So I guess it really does come down to how much we trust the engineers. Maybe we're above or near to the optimal infrastructure point, and the engineers are just suggesting unnecessary repairs, intentionally or unintentionally.<br /><br />But in addition to the testimony of the engineers, we have the evidence of declining U.S. infrastructure spending over time. At some point, we'd expect it to hit or oscillate around some kind of steady state.Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.com