tag:blogger.com,1999:blog-17232051.post6174102560066567600..comments2024-03-28T03:16:14.104-04:00Comments on Noahpinion: Why I am a fiscalistNoah Smithhttp://www.blogger.com/profile/09093917601641588575noreply@blogger.comBlogger44125tag:blogger.com,1999:blog-17232051.post-68365571155931706852014-06-11T11:35:05.523-04:002014-06-11T11:35:05.523-04:00I admire your good manners, which i can't emul...I admire your good manners, which i can't emulate. I will carefully avoid citing the non-fiscalists you quoted by name. I assert that their main method of argument is setting up straw men. They wish to debate with the fiscalist who seriously proposed putting money in bottles in coal mines to stimulate the mining industry. The debate in which they participate has nothing to do with the actual current policy debate.<br /><br />The uestion isn't whether the down turn justifies a huge increase in public sector investment. The question is whether public sector investment should be cut a lot (that is the fiscalist pole) or more sharply than it has been cut since the post Vietnam demobilization.<br /><br />The position you agree is not fiscalist is well to the left of the position advocated by Obama since January 2010 an so far to the left of the current policy debate that it might as well be Bolshevik or Bourbonist. The vast majority of policy makers and of ordinary citizens consider deficits to be bad bad bad and believe that cutting the deficit (also during a recession with zero safe nominal interest rates) is good for the economy.<br /><br />The idea that a less countercyclical fiscal policy would require financing projects which were considered dubious in 2006 is based on a complete refusal to look at the data. It is possible for someone who thinks that government investment was much too high in 2006 to argue that it isn't too low now. But the argument against fiscalists is based on refusal to note the basic facts about current policy. <br /><br />See what has happened to total gross governmentr investment since Lehman collapsed (hint not quite as dramatic as what happened to Lehman)<br /><br />https://research.stlouisfed.org/fred2/graph/?graph_id=180973&category_id=<br /><br />I ask two questions. Does someone who ignores this data have anything useful to contribute to the discussion ? Does any anti fiscalist do anything with this data but ignore it ?<br />Roberthttps://www.blogger.com/profile/14455788499385673507noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-55084305045005203522013-06-25T10:15:19.929-04:002013-06-25T10:15:19.929-04:00My latest blog post: "The Employment To Popul...My latest blog post: "The Employment To Population Ratio (EMRATIO) is NOT a good indicator" http://marketmonetarism.blogspot.com/2013/06/krugman-is-wrong-again-employment-to.htmlAldreyMrhttps://www.blogger.com/profile/00354672746177530056noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-6822440839110927172013-06-23T16:38:16.495-04:002013-06-23T16:38:16.495-04:00Isn't the key question what is the balance bet...Isn't the key question what is the balance between monetary and fiscal stimulus? Forgive me for being cynical but doesn't monetary stimulus directly benefit the finance world and indirectly the rest of us whilst fiscal stimulus stands a better chance of reaching the real economy.Jonhttp://new-boiler-cost.co.uk/solar-panels-cost/noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-39774967110047093952013-06-23T07:15:27.848-04:002013-06-23T07:15:27.848-04:00mattski,
can't you, by now, recognize a troll...mattski,<br /><br />can't you, by now, recognize a troll when you see one? :)CAnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-33282190126036101932013-06-19T11:03:41.648-04:002013-06-19T11:03:41.648-04:00Where is Fiscal Stimulus ... thru Tax Cuts???
The...Where is Fiscal Stimulus ... thru Tax Cuts???<br /><br />The Bush Tax Cuts did, in fact, help reduce the dot.com bubble pop recession.<br /><br />Prop 2b: The US is overtaxed, so we need to increase the spending and saving and rewards for successfully working and creating wealth. Tax cuts for taxpayers do this best.<br /><br />2b.2 Growth after tax cuts is more sustainable than growth from gov't spending.<br /><br /><br />Many conservatives against "fiscal policy" are especially against more gov't spending. That's not the only kind there is -- but statists seldom include tax cuts as an effective fiscal option.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-9237497099114194142013-06-18T21:54:32.083-04:002013-06-18T21:54:32.083-04:00"Class interests buried under truckloads of g..."Class interests buried under truckloads of greed"<br /><br />You mean like purchasing teachers and other political class workers a two or three year exemption from economic reality at the cost of eliminating the earning power of *anybody* (millionaire or humble retiree) prudent/responsible enough to have saved/invested rather than recklessly borrowed or sold their vote to the State?<br /><br />Stimulus *in practice* is 80% vote-buying, with all the long-term distributional corruptions that entails.<br /><br />And ZIRP is the necessary tool for such stimulus - how else to finance 80%+ Debt-to-GDP ratios without soaring interest costs or political blowback?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-88016894697986114662013-06-18T21:37:07.349-04:002013-06-18T21:37:07.349-04:00"I am a using-up-lax-resources-ist."
Ho..."I am a using-up-lax-resources-ist."<br /><br />How well did ZIRP I (2002-2005) work out? <br /><br />Those "slack" resources were put to "work" building 2 million plus pointless McMansions - which it has taken 5 years (and counting) to work off - and taken the world economy off a cliff.<br /><br />All to allegedly "return to trend growth" in 2002-2005.<br /><br />In retrospect, ye olde "slack" looks a helluva lot smarter than the stimulus it inspired.<br /><br />In the real world, digging holes in the ground or McMansions in the sky isn't productive activity - ZIRP inspired capital mis-allocations have caused much more harm than they have avoided.<br /><br />How monstrous the legacy of ZIRP II (2008 to infinity and beyond)?<br /><br />"Ideally, I'd like the private sector to use up the lax resources"<br /><br />How about definitively answering *why* the private sector isn't doing so *before* ginning up ye olde government stimulus/patronage/vote buying machine?<br /><br />For example, the Obama stimulus didn't primarily go to renovating our shared infrastructure...it went to purchasing a two or three year exemption from economic reality for millions of teachers and other government workers - core political allies all.<br /><br />That is "socialized" macroeconomics in *practice* - Tammany Hall writ large. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-81800390129520471332013-06-18T12:13:10.408-04:002013-06-18T12:13:10.408-04:00"because of the multiple reasons to want gove..."because of the multiple reasons to want government spending"...all of which are completely destroyed by the <a href="http://pragmatarianism.blogspot.com/2013/03/the-preference-revelation-problem.html" rel="nofollow">preference revelation problem</a>.Xerographicahttps://www.blogger.com/profile/14978832439622230018noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-89257551088847302202013-06-18T07:00:11.606-04:002013-06-18T07:00:11.606-04:00If you believe proposition 3 and not proposition 2...If you believe proposition 3 and not proposition 2, then you could plausibly argue for increasing spending on infrastructure while cutting other areas of government spending. (Like you, I think the empirics and the models too doubtful to have any defendable opinions on in the short-term). Tracy Whttps://www.blogger.com/profile/08999246551652981965noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-26940898173835083272013-06-17T14:32:03.598-04:002013-06-17T14:32:03.598-04:00Why is "sustainable" good?
Are you ques...<i>Why is "sustainable" good?</i><br /><br />Are you questioning the value of sustainability? I thought you were instructing us on government's impotence at producing that sort of growth? I don't think the combination of arrogance and vapidity is any coincidence, fwiw.mattskihttps://www.blogger.com/profile/07936264188400397646noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-74992983634556538402013-06-17T13:59:24.979-04:002013-06-17T13:59:24.979-04:00you could just believe that the central bank won&#...you could just believe that the central bank won't inflate on its own but will tolerate inflation from expansionary fiscal policy.. that's basically the evans rule – tightening conditioned on a good economy rather than loosening conditioned on a bad economy. That's why it's a crappy rule (and why fiscalism will work).<br /><br />Or you could believe that AS is flat with excess capacity.ashok raohttp://ashokarao.comnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-81688884572937612642013-06-17T11:29:22.112-04:002013-06-17T11:29:22.112-04:00Sure. Though you have to believe in some pretty se...Sure. Though you have to believe in some pretty severe nonlinearities, AND that we're now at the Goldilocks point.Noah Smithhttps://www.blogger.com/profile/09093917601641588575noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-88682871135697881252013-06-17T11:08:00.693-04:002013-06-17T11:08:00.693-04:00Noah,
Would you view the theory of monetary offse...Noah,<br /><br />Would you view the theory of monetary offset as separate from proposition one, or a logical implication of proposition one?<br /><br />That is to say, can you be skeptical that monetary stimulus will *boost* unemployment and simultaneously believe that a central bank that engineers low inflation can <i>impede</i> fiscal stimulus from being effective?<br /><br />Another way of asking my question is, do you believe that fiscal stimulus can boost output and employment without increasing inflation? Samhttps://www.blogger.com/profile/03796339415643845682noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-36810333738748278012013-06-17T10:15:43.198-04:002013-06-17T10:15:43.198-04:00Why is "sustainable" good? At what poin...Why is "sustainable" good? At what point did we all decide that the most important aspect of growth is its "sustainability"?<br /><br />Obviously, given a long enough term, nothing is "sustainable." The sun will eventually burn out.<br /><br />I like things that are unsustainable. When I have a few beers and get that buzz of euphoria, I know that buzz is unsustainable. I still go back and do it again, though.<br /><br />What is interesting is that my objection to your preference about “sustainability” is not even in the top three stupid things in your 2 (!) sentence comment, which would be:<br /><br />1. Certainty ("for sure") in the face of a skeptic (you really don't have any idea how mockable your certainty is, do you?)<br />2. You state your "never" assertion in the first sentence with absolutely no proof (or as noted above, without any idea that the definition of “sustainable” is likely to be different for different people).<br />3. How do you know what the non-virgin world would or would not care about?<br /><br />I'm not even mad. The brevity with which you are able to establish so many mistakes is impressive.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-20291133228450398562013-06-17T08:06:54.011-04:002013-06-17T08:06:54.011-04:00Quotes like Beckworth's make me scratch by hea...Quotes like Beckworth's make me scratch by head. On views such as his, it is a kind of miracle that any government anywhere has ever successfully managed to provide for the national defense in a dangerous world, educate large numbers of its people, care for the health of those people, organize the retirement support for its seniors, and build networks of roads, bridges and tunnels linking up the various parts of their countries.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-38482934665055952472013-06-17T07:46:48.046-04:002013-06-17T07:46:48.046-04:00That would be because of the overall philosophical...That would be because of the overall philosophical attitudes of many Market Monetarists as separate from their economic 'beliefs'.<br /><br />i.e. MMers tend to dislike gvt, gvt spending, taxes etc. I think that they'd like the gvt to be as small as reasonably possible within a modern world and let the economy to the direction of the CB, which cannot fail if it targets NGDP.<br /><br />The whole universe is solved without having to do something as messy as raising taxes/emitting a bond to build a highway.Anonymoushttps://www.blogger.com/profile/02635749385748660522noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-82587057535693234362013-06-16T20:18:31.198-04:002013-06-16T20:18:31.198-04:00I agree that the question should be where the marg...I agree that the question should be where the <i>marginal</i> dollar will go, not where the average dollar goes, but that is a question Cochrane does not ask. And it's a tricky question, because the growth of entitlements has been primarily a natural result of leaving the main entitlement programs as they are while the number of seniors and the cost of health care grows, not as a result of congress constantly deciding to create new entitlement programs or expand their scope. I think you are entirely backwards as to where the marginal dollars come from/go.<br /><br />One way to ask the question is, if congress decided to spend an additional $x00 billion in addition to what they're currently planning to spend, what will it go to? If you look at the stimulus spending, the ratio of public investment (infrastructure, education, research) to entitlement spending is quite high, much higher than in the budget as a whole. Another question is, if congress decides it must cut $x00 billion it was planning to spend, where will it come from? And here the history is quite clear: 1. public investment 2. anything but entitlements. So if we starve the beast, or hold the size of government constant while the number of retirees continues to grow, if the past is any guide at all to the future, we can expect public investment of every sort to be decimated in order to preserve entitlement spending.<br /><br />Decide for yourself whether its worth destroying infrastructure investment and research completely so that after that the government will finally be forced to do the economically vital work of pushing seniors out on ice floes. I mean, cutting entitlement spending.Eric Lhttps://www.blogger.com/profile/17688525347746547529noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-30284748720446186822013-06-16T17:38:20.658-04:002013-06-16T17:38:20.658-04:00Which one is deadly wasteful: having millions of i...Which one is deadly wasteful: having millions of individuals unemployed for years or putting these idle resources back to work and "waste" some money in the process? The right-wing economists have this simplistic and dishonest measure of efficiency always and everywhere in terms of profits!! Class interests buried under truckloads of greed and offered to us as freedom, free market, free men, and all that senseless free brouhaha!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-68589932248924436472013-06-16T17:04:16.994-04:002013-06-16T17:04:16.994-04:00government spending is not and will never be a sou...<i>government spending is not and will never be a source of sustainable economic growth.</i><br /><br />Not that I'm a militarist by any means, but do you have any idea how much government money is spent every year (let's begin our thought experiment with the end of WWII) on military and intelligence contractors, and how many people work in that sector and feed directly off Uncle Sugar's tit? And let's not leave out the military and intelligence branches of gov't either.<br /><br />Is 70-odd years 'sustainable' enough for you?mattskihttps://www.blogger.com/profile/07936264188400397646noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-59671282394852335122013-06-16T16:49:40.917-04:002013-06-16T16:49:40.917-04:00With a great friggin' title.With a great friggin' title.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-23587727765956903282013-06-16T14:24:52.806-04:002013-06-16T14:24:52.806-04:00Derp...Derp...Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-63840834957784883882013-06-16T13:11:20.170-04:002013-06-16T13:11:20.170-04:00Only 2 implies an increase in government spending ...Only 2 implies an increase in government spending given the current level. 3 can imply an increase or more likely re-shuffling of funds. <br /><br />Since you mentioned Cochrane, you may want to look at:<br />http://johnhcochrane.blogspot.com/2012/02/where-your-money-goes.html<br /><br />Most likely the marginal tax dollar is spent on getting a retired baby-boomer viagra, as opposed to funding the next green technology.<br /><br /><br />So, you are missing an additional probability: Probability that the money for 'public capital' can be found from current funds without an increase government spending.Mikenoreply@blogger.comtag:blogger.com,1999:blog-17232051.post-47794681123644397382013-06-16T12:33:03.938-04:002013-06-16T12:33:03.938-04:00"where government spending is not and will ne..."where government spending is not and will never be a source of sustainable economic growth"<br /><br />But government spending on science, education and infrastructure has been a source of sustainable growth. I would include in Noah's infrastructure spending seriously increased spending on science. Maybe we could re-purpose those NSA server farms to scientific research. Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-41347040177163187102013-06-16T12:27:27.332-04:002013-06-16T12:27:27.332-04:00simpler to multiply the probabilities of failure a...simpler to multiply the probabilities of failure and subtract from 1: <br /><br />probability fiscal stimulus will fail: .7<br />probability infrastructure spending will fail: .6<br />probability both will fail .6 * .7 = .42<br />therefor, probability one or both will succeed = 1 - 0.42 = 0.58Absalonhttps://www.blogger.com/profile/09131268683451462949noreply@blogger.comtag:blogger.com,1999:blog-17232051.post-17799793227460968362013-06-16T10:45:58.530-04:002013-06-16T10:45:58.530-04:00I've grown fond of Krugman's coingage: &qu...I've grown fond of Krugman's coingage: "The Stimulati."<br /><br />Sounds like something you'd order at Starbucks.<br /><br />I'm an All-Of-The-Above-ist. Do it all like Abe and Yoda Kuroda, skepticism be damned. Review the historical case studies. Roosevelt. Chamberlain. Japan in the 30s, etc.<br /><br />As often is the case with economics, the problems are political. <br /><br />With fiscal policy, you need to run the Congressional gauntlet. With monetary policy the FOMC simply needs to decide to ignore the inflationistas/bubblistas and move forward. Fiscal policy gets more bang for the buck. Monetary policy has issues with fairness and inequality. I think the monetarists like Beckworth are needlessly worried that the government will get an inch/take a mile and encroach on the private sector. That's not the history, it's propaganda a la Hayek. Let's hope that the government does encroach on the health care sector and domesticate the financial sector.<br /><br />What about currency/trade policy? I would add Dean Baker to the taxonomy as one who focuses on trade and exchange rates. This time the politics are international.<br />Peterhttps://www.blogger.com/profile/08272747870634233567noreply@blogger.com