American Issues Project Slams Stimulus Bill As Large
When the economy enters a recession, you lower interest rates. When monetary policy’s gone as low as it can, you try fiscal expansion. That means you need a deficit that’s large relative to the size of your economy. The US economy is about $13 trillion a year. Which is a very big number. Which means that to be a sizeable fraction of that number, you need another big number. Enter the American Issues Project to try to slam the stimulus as big:
After watching liberal allies of President Barack Obama flood the airwaves in support of the stimulus bill, a conservative third-party group is countering with a provocative new commercial using Jesus Christ to emphasize the scale of the $787 billion package.
The American Issues Project, which briefly aired a TV spot in last year’s presidential race, will go up on Friday with a TV spot that marks the dollars spent with the passage of time.
“Suppose you spent $1 million every single day starting from the day Jesus was born — and kept spending through today,” says the announcer as an image of the three wise men flashes on the screen. “A million dollars a day for more than 2,000 years. You would still have spent less money than Congress just did.”
Trying to check the math, 2,000 years times 365 days in a year = 730,000 days times $1 million a day equals $730,000,000,000. That is, indeed, a smaller number than the $787 billion size of the stimulus plan. Of course the actual spending in the package is worth hundreds of billions of dollars less than that since about a third of the total package is tax cuts. It’s been strange to see the GOP rail against the need for fiscal stimulus amidst an economic emergency, but their newfound habit of deciding that tax cuts are the same as new spending is genuinely weird. But be that as it may, Steve Benen observes that costing a lot is the purpose of the stimulus so it’s not clear what kind of sense this makes.
Invading Iraq was supposed to improve American national security. So it makes sense to put the alleged gains of the war alongside the $1 trillion price tag and ask whether hawks really think it was worth all that money. But the stimulus isn’t like that. It’s not intended to be a cost-effective way of juicing the economy. It’s intended to juice the economy by costing a lot of money.
46 Responses to “American Issues Project Slams Stimulus Bill As Large”
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February 20th, 2009 at 9:34 am
Suppose you’d started with five loaves and seven fishes in, say, 30 AD. And then you’d kept multiplying those loaves and fishes for two thousand years. You would have a mass of food greater in size than the Solar System and a bunch of lazy welfare-addicted Negroes and Mexicans who expect the government to solve all their problems. Which conclusively proves that Jesus hates poor people. Q.E.D.
February 20th, 2009 at 9:36 am
No weirder than they sudden realization last September that FICA taxes aren’t actually taxes, when Obama dared to propose lowering them by using a rebate system.
Did you know that people who look at their paychecks and saw about 1/8 taken by the federal government don’t actually pay taxes? Me neither!
February 20th, 2009 at 9:42 am
Thank you James Gary.
We could also imagine taking every Republican and right wing loudmouth ‘Christian’ and placing them head-to-toe in orbit around the Moon.
It would be expensive to do, but possibly worth it.
February 20th, 2009 at 9:46 am
What Would Jesus Stimulate?
February 20th, 2009 at 9:48 am
Tax cuts for low-income peasants, who are inherently undeserving, are spending. Tax cuts for the upper classes are investments. Or offerings to our own little demigods, at least.
February 20th, 2009 at 9:50 am
Suppose you sodomized a young boy every day since the day Jesus was born. Would you have molested more by now than the sum total of boys molested by Catholic priests and other Christian clergy in the same time frame? And imagine how much fun you’d have had if you were with the guy that was spending a million dollars a day in the same 2000 years? A million dollars the year Jesus was nailed to the cross probably could’ve bought his freedom. Then the three of you could’ve run rampant for two millenia!! Then again, all the “Died for your sins” hooey would be moot. “Raping small boys for your sins” just doesn’t have the same ring to it.
February 20th, 2009 at 9:52 am
I liked the reaction from TPM reader BW myself: http://www.talkingpointsmemo.com/archives/2009/02/forgive_me_lord_for_mitch_has_sinned.php
“Senator McConnell is flaunting his economic ignorance because if you started the day Jesus was born and created TWENTY million dollars in wealth every day you would have the wealth created in the US economy each year. AND if you flushed TWO million dollars down the toilet every day since Jesus was born you would have the credit losses in the US economy just last year. AND if you flushed THREE million a day, you would have lost less than the money that this recession is projected to cost by the end of next year. We no longer measure boats by cubits and we should not design economic stimulus based on a Jesus’ birthday, so will the Minority Leader please either engage in a serious talk about economic policy or step aside and let the adults handle it?”
February 20th, 2009 at 9:53 am
If Jesus added 100 people to heaven every day since he was born of woman 2000 years ago, that would still add up to only 73 million people and there’s a lot more people in the US than that, so the stimulus is OK with Jesus.
February 20th, 2009 at 9:53 am
Oh, btw, when we get around to talking about Social Security, FICA taxes are totally going to be taxes again, and shame on those socialist Democrats for saying they’re not.
February 20th, 2009 at 10:08 am
If you spend $1,000,000 every day since the birth of a fictional character, have you spent zero or infinity?
February 20th, 2009 at 10:12 am
“That means you need a deficit that’s large relative to the size of your economy.”
A conclusion not supported by any facts.
I can come up with a dozen different scenarios in which a very small stimulus can solve a very big depression. Want me to make one up for you?
February 20th, 2009 at 10:17 am
MattYoung: Yes, please do!
February 20th, 2009 at 10:17 am
the US spends a trillion dollars every year on defense and related activities. every fucking year.
February 20th, 2009 at 10:19 am
It’s not often that the first comment out of the gate wins the thread. James Gary, you get a free beer, collectable(sp?) from me, if you ever come to Japan.
February 20th, 2009 at 10:29 am
Rich, do you want make believe, or potentially real.
Some small but important stimulus actions by large monopolies.
Clinton era deregulation of telecoms.
IBM choosing to build the IBM PC compatible computer.
Here is a make believe stimulus.
A virus hits the US working population, everyone in manufacturing and most services quit working, a huge depression sets in. The government countervailing stimulus is to sick the Center for Disease control on the problem, after three years of heart rending depression, the 100 million dollar investigation yields a common vaccine and the economy recovers.
The point is, using the multiplier metaphor, when a severe, inelastic constraint hits one or two critical resources, then the countervailing stimulus need not be big, but may just need to target solutions for the particular critical constraints.
Multipliers for investing in the constrained resource is huge, multipliers for investing in the unconstrained resources is small. It is identifying the constraint and targeting the relief. That is why, now, we are seeing many advocates try to identify their favorite government programs as the handling the critical restraint.
February 20th, 2009 at 10:34 am
So do tax cuts count as spending or not? Seems to me that both sides of the political aisle play pretty fast and loose with their answer.
February 20th, 2009 at 10:37 am
“So do tax cuts count as spending or not? Seems to me that both sides of the political aisle play pretty fast and loose with their answer.”
Payroll taxes are pretty stimulative, since people just get like $20 extra per check and they’re going to spend most of that. Other taxes, not really, since if people get a refund check they’re more likely to save it/pay down debt. But in general spending has a higher multiplier than tax cuts.
February 20th, 2009 at 10:43 am
Matt says:
But the stimulus isn’t like that. It’s not intended to be a cost-effective way of juicing the economy.
No Matt but the ObaStimulator (it’s big, it’s black, and it’s vibratory!) is supposed to be an effective way of stimulating the economy out of recession. And ultimately it will be judged cost effective IF it accomplishes that task.
But that is not likely to be.
Just consult Saint CBO.
Or da markets.
Or any reputable economist.
The ObaStimulator is geared towards making things a bit better in time for the 2010 elections.
After that we are going to hear about taxes going up and Federal spending coming under control.
Of course at that point the ObaMessiah’s re-inflation of the welfare state (Section 8 wasn’t enough, NOW WE MUST BUY THE POOR HOUSES!) will have established much higher social welfare spending levels so that even bringing it back to 2008 levels will be touted as shameful cuts.
The game is so transparent that yes even John Q is catching on.
75 Billion for mortgage relief?
Almost every homeowner struggles to make their bills.
You don’t think every one of them won’t wonder why and resent that they and their family deserve help less than anyone else?
ObaMeister is going to get a big dose of American reality real fast.
February 20th, 2009 at 10:45 am
Notice that these people’s view of their precious Jeebus never looks like he’s actually described in the f#@$ing bible?
February 20th, 2009 at 10:46 am
my god, we’ve see some dumb-ass commenters here at matthew’s over the years, but i don’t know if we’ve ever seen on as dumbass as JT.
as for mattyoung, dtm, you’re much too nice: that “example” makes absolutely no sense at all.
February 20th, 2009 at 10:51 am
ObaMeister is going to get a big dose of American reality real fast.
Uh huh. Any minute now, that “bitter” remark is going to sink him. Unless Reverend Wright gets him first. Or Bill Ayers. Or Joe the Plumber. Or Sarah Palin – hell, everyone loves Sarah Palin. Anyway, people hate the stimulus bill, and the Republicans are the big winners. Barack Obama is so dead.
Hey Rocky, watch me pull a rabbit out of my hat.
February 20th, 2009 at 11:12 am
btw, i did want to mention that there is an argument for fiscal measures during a recession even if monetary policy actually has some traction: the most obvious are the “automatic” and “semi-automatic” stabilizers like revenue sharing with states, extended unemployment benefits, and similar matters.
February 20th, 2009 at 11:48 am
I would say that the GOP needs some intellectual new blood, but the truth is that there are conservative intellectuals who acknowledge the need for fiscal stimulus (e.g., Greg Mankiw, Bob Bartlett, etc.). Perhaps the GOP needs some new political blood that can get the rest of the caucus to listen to them. The stimulus bill signed by Obama deserved principled opposition on its contents (e.g., that it didn’t provide enough fast-acting, easily-reversible stimulus), not dogmatic, illogical, and inconsistent opposition based on its size.
February 20th, 2009 at 11:49 am
Matt Young is just bummed that we’re not spending the stimulus in Baghdad, thus extending extending the Iraq Stimulus Plan of 2004-2008.
February 20th, 2009 at 11:58 am
Two of the three things Mankiw argued for (aid to the states and extending unemployment benefits) are in the stimulus plan as passed. The third, reducing payroll taxes, is just Mankiw’s underhanded attempt to blow a hole in the financing for Social Security. Other than that, your identified conservative “intellectuals” did not identify a single idea regarding “fast acting.”
And, btw, Mankiw lost all credibility when he failed to note that the Iraq Stimulus Plan of 2004-2008, which he supported, lacked a multiplier greater than one.
February 20th, 2009 at 12:40 pm
After reading
I knew that this alternate reality had to have been populated by either WorldNetDaily or Poltico. And I wasn’t wrong.
“Liberal allies” “Flood the airwaves”? Where?? Which airwaves? The ones completely dominated by the likes of Shelby, Vetter, DeMint, McConnell, Sanford, Armey, Forbes, etc., etc.?
And yes, this conservative third-party group just has to weigh in because, you know, those evil libs just won’t give Republicans any equal time to make their case.
February 20th, 2009 at 1:00 pm
Overall, the plan offers too little stimulus, too late. The Fed estimates that the economy will contract this year and grow again in 2010. Given that, it would make sense for the bulk of the stimulus to hit this year, when it’s needed most. According to the CBO estimates, it looks like less than a quarter will hit this calendar year.
That’s a specious objection to a temporary payroll tax holiday designed to provide fast-acting, temporary fiscal stimulus, for a couple of reasons. First, the funds in the Social Security Trust Fund are invested in Treasury Securities (i.e., they are lent to the U.S. government and immediately spent). Thus, the long-term viability of the Social Security Trust Fund depends on the long-term fiscal viability of the U.S. Claiming that a temporary payroll tax holiday would “blow a hole” in the financing of Social Security is like claiming that any other temporary, deficit-financed fiscal stimulus would “blow a hole” in the long-term fiscal viability of the U.S.; i.e., a similar argument could be used against any deficit-financed fiscal stimulus.
Second, if when cost of paying Social Security benefits starts exceeding the revenues from the payroll tax, the government will likely make up the difference from general revenues. That is, after all, what the government already does with Medicare, since Medicare’s portion of the payroll tax doesn’t fully cover the costs of Medicare. If you were honest and consistent in your criticism, you would argue that, unless Medicare’s portion of the payroll tax were hiked to cover the full cost of Medicare (which would probably require doubling it), keeping it artificially low is “blowing a hole” in the financing of Medicare.
February 20th, 2009 at 1:10 pm
DTM,
“In fact, my suggestion to them would have been for them to go BIGGER–say a really big payroll tax cut, really big unemployment benefits, really big discretionary outlays to the states (federalism!), plus a bunch of infrastructure spending.”
I don’t know if I would have gone bigger overall — $800 billion is more than 5% of GDP, and the Fed isn’t estimating a contraction anywhere near that large for ‘09. But I would gone in mostly the same direction you mention (increased unemployment benefits, shovel-ready infrastructure spending, aid to states, a payroll tax holiday), with a couple of differences. My suggestion would have been to make the aid to the states much bigger, but I would have made it in the form of loans and not grants — loans with generous terms (e.g., no interest due for the first couple of years), but loans nonetheless. I would have also suggested a big tax credit (say, 50%) for businesses buying new equipment, but make that credit expire by the end of ‘09, to encourage companies to spend money this year. There are a lot of non-financial companies with strong balance sheets that are sitting on boatloads of cash (e.g., check out how much net cash Cisco has on its books), and that would encourage some of them to spend some of it.
The main point is that if the GOP went in this direction, they could have argued, accurately, that their version of the stimulus package would give the economy a bigger boost this year and put more money in the average American’s pocket.
February 20th, 2009 at 1:39 pm
Suppose we accord the conservative charge here a perverse merit. Absolutely, if the radical right had been setting aside funds regularly in, never mind Jesus, its long years in power in Washington, since at least 1980, for investments in, say, American labor and infrastructure, rather than squandering much more in tax cuts and militarism, we wouldn’t be in this mess now.
February 20th, 2009 at 1:58 pm
How much would Jesus spend?
February 20th, 2009 at 3:03 pm
Suppose you donated 1 million brain cells every single day to the conservative movement starting from the day Jesus was born – and kept donating through today.A million cells a day for more than 2,000 years. You would still have really really dumb conservatives.”
February 20th, 2009 at 3:05 pm
People like Mankiw were arguing for less of a stimulus than exists in the current plan. Apparently, you are unaware of that. You might want to review the following.
Funny how you and Mankiw don’t mention the size or duration of your temporary payroll tax holiday. I, on the other hand, would have preferred no tax cuts in the stimulus at all, since we know from the last round, they had very little effect.
You start with the false premise that Congressional Republicans were engaged in a good-faith debate on the stimulus.
February 20th, 2009 at 3:13 pm
I picture Jesus on Wall Street with a whip.
February 20th, 2009 at 3:51 pm
Wait a second. If you adjust that number for inflation, 730 billion become way larger. Adjust that bad boy for inflation and you get a figure way larger than a trillion. I mean I know how much a million dollars has inflated since 1950; can you imagine how much a million dollars in 1450 has inflated?
February 20th, 2009 at 6:44 pm
The reason why people are reluctant to consider Social Security taxes as taxes is that they are not, strictly speaking, “pure taxes,” as the person paying them gets a specific benefit from them (that is, his Social Security benefits are affected by how much he pays).
Most taxes are not connected to a specific benefit. The fact that you have an income and pay incomre tax, or that you pay more income tax than someone else, does not entitle you to any special services that someone who has a lower income and pays little or no taxes on it. The amount of property taxes paid to fund a local school generally does not have anything to do with how much you use the school system. But what you pay into Social Security affects what you get out of it.
Therefore, a cut in Social Security tax that does not result in a cut in benefits is, to some extent, a subsidy as much as it is a tax cut.
This could be solved, I suppose, if people were willing to basically take the cut out of the “Social Security trust fund,” that is, if the tax cut were funded out ofhte General fund and if the Social Security balance sheet were properly altered to reflect the cut.
But the dishonest politicans generally do such tax cuts by giving refundable income taxcredits on people who do not pay income tax, thereby making Social Security contributions to the General Fund look larger than they really are.
February 22nd, 2009 at 9:58 pm
Glaivester,
Do you or do you not support the Stimulus Bill and why?
I’m confused on my views. I did not support it, but reading your posts make so much sense to me that, before I turn to quoting you and showing off to everyone I know, I’d like to know your response to the prior question.
-Your fan!
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