THE DAILY NEWS Poll: Crist is Vulnerable – Adam Smith, TampaBay.com On Free Trade, White House Must Lead – IBD Editorial Why Ruin the World’s Best Health Care? – John Stossel, RealClearPolitics Public Plan Could Drive Private Insurers Out of Business …

I’m an idiot. I am so used to being able to edit after posting that I left three reference paragraphs at the end of my last post. Pls delete for clariety – I will not do this again.

Mark H.

“That’s GOP code for tax cuts, no.” (Marmico)

Perhaps Marmico ought to look more closely at his chart – at least a third of the projected 2009 stimulus are tax cuts. Moreover, the recent macroeconomic literature suggests that tax cuts are a far more effective form of stimulus (with multipliers ranging as high as 3-5 times). Given recent findings, it is most likely that whatever stimulative effects that are being currently felt are due to the tax cuts.

Also, regardless of the CBO’s initial projection of spending, as far as I know the actual spending (not just distribution, BUT spending) amounts to several 10’s of billions. The classic problem, as taught in undergrad econ courses, is that fisical policy is supposed to be countercyclical, not pro cyclical. As the bulk of the spending will be late or very late (2010 and 2011) it will add create “higher highs” followed by lower lows. Most economists would consider this poor policy.

Finally, while we wait for mid-year updates by the CBO and the Administration, the most recent model I have examined (FAIR, from Ray Fair at Yale) shows that the stimulus should create around 3% growth in 2010 (1/2 to 3/4’s being from the stimulus, the remainder “natural”) followed by two years of weak growth (1.8%).

Once again I think Keith is correct. Early on the the Council of Economic Advisors recommended to Obama that he immediately spend the money to reimburse states who declare a sales tax holiday. That policy could have been implemented in late January, and the CEA were enthusiastic in their support (see Joe Klein Newsweek Article on Obama’s first days in office). Obama rejected that because he is enthralled with “investiment in infrastructure” and thought waiting two or three years to spend was better (mainly a subjective belief on his part).

I am not being partisan here – I’m just noting the facts and the literature. Had he spent 100% of the stimulus this year through tax cuts or holidays (like no personal income tax for one year) the economy would have rebounded.

Keith Hennessey has a graph up today that is very helpful in understanding the weaknesses in our economy: The width of each component bar represents its share of GDP. The height represents the growth rate of that component. This growth……

Excellent presentation of the GDP. I hope you can do that each quarter. It brings perspective to this important measurement. Thank you!

Enjoy these conservative articles and blog posts from around the web: Thomas Sowell believes we need…

This, Joe P., is one more reason why Obama is a brilliant (but despicable) politician. He has made several of these moves, using policy to advance his political power rather than using his political power to advance smart policy. For example, the more government handouts and entitlements he gives out (cap and trade allotments to utilities and manufacturing sectors, public health care plans, expanded unemployment benefits, bailouts and government loans to struggling corporations) the more people are reliant upon the government for their livelihood–such people are unlikely to vote for anyone who talks about eliminating such entitlements or handouts by shrinking government.

This is going to help him and other left-of-center elected officials, but unfortunately the American people will suffer for it. Kind of like a mild version of Hayek’s “Road to Serfdom.” The Democrats are like a less violent version of the “strong man.”