International Economists State Stimulus Packages Don’t Work

That’s right. Stimulus packages don’t work – they just redistribute income. They take your income and redistribute to someone else.

Stimulus packages do not create jobs. They never have and never will. This isn’t new News ….. This has been taught in Graduate Level Business courses for nearly 50 years. The study of “stimulus packages” in Graduate Schools across this Country is limited to a study of the “lies” perpetuated by Politicans and the liberal press about how they, “Stimulus Packages”, work. They Don’t. When you hear “Stimulus Package”, think “Pork Barrel Spending” dressed up for Halloween.

So you doubt this is accuarte? You are completely wrong. Government sponsored stimulus packages have been universally rejected as effective means to stimulate national economies.

THIS IS NOT AN ISSUE OF DEMOCRATIC AND REPUBLICAN IDEOLOGIES ….. It is a matter of Politicians lying to you while they feed their special interest groups off your tax dollars and the Economy and the Country go to hell in a hen basket……..

You doubt this ……. then read,

“Budget won’t spark growth, experts warn: Big scale belies lack of revenue, true stimulus”,

The fiscal 2009 draft budget unveiled Saturday isn’t likely to help Japan recover because the recession will probably accelerate the ongoing decline in tax revenues, economists warn. While some (politicians) say more spending is what is needed to stimulate the economy, others are suggesting the government should reconstruct its finances and embark on structural reforms to spur growth.

(Politicians everywhere are the same, they are simply looking to “buy votes” at public expense).

Finance Minister Shoichi Nakagawa stressed the budget would prevent the economy from worsening. Economists remain skeptical.”It is not clear whether it is really intended to improve the economy or perhaps with some consciousness of the impending election,” said Hideo Kumano, chief economist at Dai-Ichi Life Research Institute.

Experts, however, are stressing that fiscal reconstruction and structural reform within Government must be carried out. Regarding spending, Kumano suggested that the government should strictly select projects that will stimulate the economy.”Toward the future, (the government) should not lower the flag of fiscal reconstruction,” Naito said, urging the government to rebuild the framework for fiscal reconstruction at the earliest available date to slash the snowballing fiscal deficit.

Also see:  Flaherty says stimulus could come if necessary, but economists warn against it.

TORONTO – Finance Minister Jim Flaherty, a Politician, says his government is prepared to introduce a fiscal stimulus package if necessary in the 2009 budget, even if it means going into a deficit, but some economists say such a package could do more harm than good.

“I’m not a big fan of short-term stimulus packages,” said Don Drummond, chief economist at TD Bank. “They don’t really generate very much short-term stimulus and they very quickly become long-term structural problems.”

Drummond said the economic slowdown wasn’t created in Canada and therefore can’t be solved in Canada. “Canada is not the problem – we’re the only developed economy in which employment and consumption are still rising. Our economy’s been hit by international events, not by domestic events.” Drummond cautioned against doing “anything under the guise of short-term stimulus that doesn’t need to be done for longer-term interests.” For example, temporary tax cuts are often nearly impossible politically to reverse, and while spending on infrastructure can be beneficial, it takes a long time for major developments to be approved. “Most of the infrastructure you would mount right now isn’t going to hit the economy until 2011 or 2012 and hopefully we’ll be recovered by that point,” Drummond said. “In fact, we may even be facing an inflation problem again at that point.”

Jack Carr, an economist at the University of Toronto, said the Canadian government should be similarly wary. “I’m not in favour of a big stimulus package, particularly if it involves bailing out losers. Rewarding losers is not a way to compete in this global economy,” he said. 

Craig Wright, chief economist with Royal Bank, said whatever initiatives are introduced need to encourage productivity. “We have to do something to turn around productivity in Canada,” Wright said. He added that it was encouraging to see government trimming some of its own costs. By the time this world fiscal stimulus hits the road, the economies will probably already be in recovery,” he said. “That’s why these things never work. They’re supposed to be counter-cyclical and they end up being pro-cyclical.”

Also read:  Harper bets billions in stimulus will save economy”:

OTTAWA – The Harper government is breaking the bank in a desperate attempt to spend the economy out of recession. Tuesday’s federal budget makes no pretence at being anything but a return to Big Government that has Ottawa stretching its tentacles into every crevice of economic life – from how Canadians lease cars to imposing grace periods on credit-card companies before they can charge interest.
The underlying principle is that if the private sector won’t spend and invest, the government must do it.  

“I don’t want to call it a Christmas tree because sometimes that’s a derogative term when you’re looking at legislation,” said Bruce Yandle, an economics professor at Clemson University. “But it is a rather rich collection of things.”

Yandle said only about $170 billion, mostly the extension of unemployment benefits and the greater availability of Medicare for the unemployed, would provide much of a jolt to the economy in the coming year. And even then it’s questionable how much those breaks will lead to more spending that would help retailers and, in turn, manufacturers, he said. “When people are getting money in their pockets right now they’re not spending it. They’re saving more. They’re paying off debt,” Yandle said. “If people decided to save and pay off debt, that’s a good move, but it’s not the move that is contemplated by people who say we need to stimulate the economy.”

William Hauk, an assistant economics professor at the University of South Carolina’s Moore School of Business, said the infrastructure projects, such as roads, bridges, schools and upgrading the electrical grid, won’t stimulate the economy very soon because there’s often a long lag between when such projects are designed and when they’re built. “The phrase that gets thrown around a lot is ‘shovel ready.’ I’m not sure there are a whole lot of projects out there that are shovel ready,” Hauk said.

The infrastructure spending is creating capital assets, so that has some benefit in the long term, “but that’s not the biggest part of the spending bill,” said College of Charleston economics professor Frank Hefner. Hefner said the ideology behind such stimulus bills, that additional government spending will trickle through and revive the economy, isn’t proven to work. While some of the bill’s spending may have merit, Hefner said its effects may not appear before the economy is expected to recover on its own in a year or two.

David Brooks made the following observations in the New York Times:

There is a strong case to be made for a short, sharp stimulus package to restrain the collapse of the American economy. This would involve big, simple programs with immediate impact — a temporary cut in the payroll tax, expanded unemployment insurance and food stamps. 

There’s also a very strong case to be made for long-term government reform. America could fundamentally rethink its infrastructure policies — create a new model adapted to new modes of community-building. It could fundamentally rethink human capital policies — create a lifelong menu of learning options, from pre-K programs to service opportunities for the elderly.

But the stimulus bill emerging in the House of Representatives does neither of these things. It is an unholy marriage that manages to combine the worst of each approach — rushed short-term planning with expensive long-term fiscal impact.

The bill has three essential failings. First, it lacks any strategic vision. This $825 billion bill has to be passed within weeks. There’s no time for fundamental rethinking or new approaches. Instead, there’s a sloppy profusion of 152 different appropriations — off-the-shelf ideas that mostly create costlier versions of the status quo.

Second, the bill has relatively modest short-term impact. Many parts don’t even pretend to be stimulus measures, like funding for basic research, or special ed programs. But even the parts of the bill that aim to stimulate will have modest near-term impact.

A study by the Congressional Budget Office found that less than half of the money for infrastructure and discretionary programs would be spent by Oct. 1, 2010. (YES, THAT IS CORRECT, THE DEMOCRATIC CBO STATES LESS THAN HALF OF THE ALLEGED STIMULUS CASH GETS SPENT IN THE NEXT TWO YEARS). The total package is so diffuse, it costs $223,000 to create a single job.

According to The Washington Post, of the $30 billion devoted to highway spending, only $4 billion will be spent in the next two years. Less than $3 billion of the $18.5 billion for renewable energy and less than half the financing for school construction will be spent by 2011.


The Appropriations Committee chairman, David Obey, fulminated against the C.B.O. Wednesday, and the uselessness of economists in general, but he had no answer to these findings. ( I GUESS IT IS A REAL PAIN IN THE ASS WHEN THE EXPERTS YOU HIRED TELL YOU YOUR PLAN WON’T WORK – THE DEMOCRATIC SOLUTION – ATTACK THEIR OWN ECONOMISTS AND QUESTION WHAT THEY KNOW ABOUT THE ECONOMY ANYWAY – WHICH BEGS THE QUESTION, “WHY DID THE DEMOCRATS HIRED THEM IN THE FIRST PLACE”). 


Third, the spending measures in this bill have no sunset. In the middle of the Appropriations markup, the ranking member, Jerry Lewis from California, asked his chairman the crucial question: What happens when the economy recovers? Does this new spending disappear?Chairman Obey refused to answer, but he didn’t have to. 


On Tuesday, President Obama was inaugurated and vowed a new era. On Wednesday, the House Appropriations Committee met and showed the old era was very much alive. Democratic subcommittee chairmen sat like potted plants because all power was wielded by Chairman Obey. Republicans were in the dark because of an information embargo placed on the majority staff.
President Obama is clearly going to have to show the hard way that he meant what he said about bringing change. He didn’t run for president just to sign whatever bills the Old Bulls put on his desk. (Oh, you believe so.  I have an alternate option, Obama is just another old time Democratic Hack and the Country has returned to the old tax and spend ways of every other Democratic Administration. Obama/Biden – They could be twins. IF YOU WANT TO UNDERSTAND OBAMA’S FISCAL POLICY LOOK TO BIDEN’S RECORD).



He’s going to have to prove the hard way that he meant what he said about being pragmatic and evidence-based. That means he won’t sweep a C.B.O. study under the rug simply because the findings are inconvenient. He’s going to have to show that his plans have credibility, that a stimulus bill is really a stimulus bill, and not a Christmas tree for every special interest desire. (Let me ask you this, have your read or heard this anywhere else, that the Democratically controlled Congressional Budget Offfice questions wether the stimulus will stimulate growth or create even 1 new job? Of course not – Obama, with the help of the liberal media, is hidng this from the American People. Political “Payback” through “pork barrel spending” is more important to them than righting the American Economy).

American’s should be mad as hell at being lied to again and again. This is not a stimulus package – It is the largest pork barrel spending package ever to leave the Congress – This Pork Barrel extravaganza will not stimulate the American econmomy or help American Workers with new jobs. This “Package” will saddle the average American with huge increases in the taxes they owe down the line when the bill comes due.

If it works, the government (Politicians) estimate the $40 billion in stimulus will boost the economy by 1.9 per cent over the next two years. That’s a big if, say economists, who caution the plan could still come undone by poor execution, wrong assumptions about people’s ability or willingness to spend, and slow-to-start infrastructure projects.

As to the Obama/Pelosi Stimulus Plan passed by the House of Representatives, American Economists have said this,  

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