Friday, June 18, 2010

Friday items.

Larry Kudlow gives this blog a hat tip in his discussion of Mundell's strong dollar theory.

Heritage argues against spending increases, saying, "Excessive spending--not low revenues--accounts for 92% of deficits by 2014 and 100% by 2017."

Still, in a time of high unemployment, wouldn't it be best to start addressing deficits by increasing employment and GDP growth?

John Tamny thinks Gates and Buffett should promote growth over charity.

Paul Krugman worries that austerity will produce crisis.

In The WSJ, Prof. Douglas A. Irwin restates Jude Wanniski's thesis that Smoot-Hawley caused the Great Depression.

Alan Greenspan, who is not a supply-sider, worries about deficits.



    [quote]Finally, state and local aid happens to be an uncommonly effective form of stimulus. The difficulty with most stimulus spending is that not all of it gets spent. Tax breaks, for instance, often get saved. Mark Zandi, the chief economist for Moody's, estimates that cutting the corporate tax rate gets you only 32 cents in stimulus for every dollar you spend on it. That's not the case with state and local aid. When you're plugging state budget gaps, you know that money will be spent, because it was being spent before, and usually on something that the state's residents actually wanted.

    Zandi estimates that every dollar spent on it actually gets you $1.41 in stimulus. It's the best anti-anti-stimulus you could ask for. [/quote]

    Something for the SS babblers and self-proclaimed experts to read. Hopefully it will start to sink in a little.

  2. To TSG: Econ 101 - No act of savings ever detracts from demand. Mark Zandi is simply another neo-Keynesian promoting long discredited ideas.

  3. Bob -- Sorry but I'm not publishing TSG's response because it is more attacks on motives, etc, without significant policy analysis behind it.
    There are several substantive policy arguments on the table about but TSG prefers to name-call. Until that changes he's cut off.