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Woland
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Two economists, a Canadian and an American, have calculated the net effect of the American Recovery & Reinvestment Act (the "Stimulus"). It aint pretty. The report can be found here, with all the data and charts:

Their conclusions?

Quote:
Our benchmark results suggest that the ARRA created/saved approximately 450 thousand state and local government jobs and destroyed/forestalled roughly one million private sector jobs. State and local government jobs were saved because ARRA funds were largely used to offset state revenue shortfalls and Medicaid increases rather than boost private sector employment. The majority of destroyed/forestalled jobs were in growth industries including health, education, professional and business services.


Net loss of 500,000 jobs. In the most productive "growth" sectors. In order to preserve tax-eaters that are a further drag, further friction, on the economy.

Heckuva job, Barry!

Woland
Magnus Eisengrim
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From the linked paper:

Quote:
Even before the legislation was passed, Bernstein and Romer (2009) reported that 3.6 million jobs would be created or saved by the then envisioned legislation, relative to a no stimulus act baseline. This was based on existing estimates of scal policy multipliers. Their estimates included both the tax and spending components of the ARRA.
Congressional Budget Oce (2010) estimates that the employment increase \attributable to the ARRA" was in the range of 500 to 900 thousand in 2009 and is in the range of 1.3 to 3.3 million for 2010. Their ranges are computed based on both government spending as well as tax cut incentives in the Act. To construct these numbers (in their Table 1), they divide the total spending of the
ARRA into its components and then apply low and high output multipliers. These multipliers were delivered from previous studies.
The Council of Economic Advisors (2010) measures the employment increase due to the Act in two di erent ways. First, using a multiplier approach similar to the Congressional Budget Office, the CEA estimates that the Act had the e ect of increasing employment by 2.5 million workers (Table 4). Second, the CEA estimates a vector autoregression which includes employment from
1990:Q1 to 2007:Q4. Based on those parameter estimates, they forecast gross domestic product for the period after the Act's implementation. They then interpret the vector autoregression's forecast error for employment from 2009:Q2 to 2010:Q2 as being due to the policy. According to these estimates (Table 5), at the end of 2010:Q2, the Act had increased employment by 3.6 million
workers.
Blinder and Zandi (2010) nd that the employment increase due to the ARRA (including both spending and tax cuts) was 2.7 million jobs. Their estimate is based on the Moody Analytics model of the U.S. economy, which is a statistical model that includes restrictions based upon standard Keynesian assumptions.
Wilson (2011) estimates the job e ects of the Recovery Act using state-level variation in a manner similar to ours. He instruments for endogenity using two cost estimates for the ARRA that existed prior to the Act's passage. He considers the e ect on employment at di erent horizons following the ARRA's implementation. For employment through October 2010, he nd that there were 800 thousand additional jobs because of the stimulus. This is close to our \best case" scenario for the ARRA described in the previous section.
While Wilson's above number is relatively small compared to other studies, he does nd larger employment e ects at a more short-run horizon. When evaluating the employment growth through February rather than October of 2010, Wilson nds that the Act saved/created 2.3 million jobs.
Feyrer and Sacerdote (2011) conduct both a cross-sectional and time series analysis to estimate the employment e ects of the ARRA. Based on state-level data, their cross-section estimate implies that the Act created/saved 1.9 million jobs, while their time series estimate implies that the Act created/saved approximately 845 thousand jobs.
The most crucial di erence between their analysis and ours may be aggregation. In their regressions, the jobs e ect is restricted to be identical across employment sectors. Our modest disaggregation into four sectors demonstrates that di erent sectors responded di erently to ARRA aid. First, we are able to reject statistically the hypothesis of identical sector responses. Second, these differrences are also quantitatively important. Third, the di erent trend behavior, over the last decade, across sectors suggests di erent employment processes are at work.
Finally, the practical consideration that much aid owed through state and local governments suggests that government employment should be treated di erently than private-sector employment. Also, differences between our results and theirs might be explained by the di erences in instruments; Feyrer and Sacerdote (2011) use the average seniority of members of the U.S. House of Representations to control for endogenity.
Cogan and Taylor (2010a) look at Bureau of Economic Analysis data on government purchases of goods and services.38 They nd that most government purchases occurred at the Federal rather than state and local level and that these purchases account for only 2% of ARRA aid. They argue that state and local governments did not make purchases of goods and services, but rather increased
transfer payments and reduced borrowing. As such, there was only a negligible impact of the Act on aggregate output and employment. While our analysis con rms the fact that much funding went through states, it is not clear whether wages and salaries of government workers are fully or even partially captured by the National Income and Product Account measures of government purchases.


So the authors acknowledge that there are a number of studies that disagree with theirs. So why aren't you linking to them and saying "good job, Barry"?

I'm no economist by any stretch, so I cannot pretend to be able to adjudicate between the conflicting claims. What makes this one so compelling, Woland?

John
The blood-dimmed tide is loosed, and everywhere
The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity.--Yeats
Woland
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Methodology.
balducci
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Quote:
On 2011-05-18 06:07, Woland wrote:
Two economists, a Canadian and an American, have calculated the net effect of the American Recovery & Reinvestment Act (the "Stimulus"). It aint pretty.

Wrong again, sorry. Both are Americans. Conley just works in Canada, but is an American (according to his CV anyway). Y'all got that unemployment thing going on down your way, don'tcha know.

http://economics.uwo.ca/faculty/conley/cv.pdf
Make America Great Again! - Trump in 2020 ... "We're a capitalistic society. I go into business, I don't make it, I go bankrupt. They're not going to bail me out. I've been on welfare and food stamps. Did anyone help me? No." - Craig T. Nelson, actor.
HerbLarry
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Look around you. If you can't see that it's not pretty then get your peepers checked.
You know why don't act naive.
Woland
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Canada actually presents an interesting comparative case, though, doesn't it? There has not been a mortgage/real estate meltdown in Canada, in part because the Canadian government never established a program to force banks to write mortgages for people who couldn't afford them, and in part because, unless I am mistaken, a secondary market (and its attendant distortions of risk) for Canadian mortgages does not exist as it does in the US.
balducci
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Quote:
On 2011-05-18 11:06, Woland wrote:

Canada actually presents an interesting comparative case, though, doesn't it? There has not been a mortgage/real estate meltdown in Canada, in part because the Canadian government never established a program to force banks to write mortgages for people who couldn't afford them, and in part because, unless I am mistaken, a secondary market (and its attendant distortions of risk) for Canadian mortgages does not exist as it does in the US.

There is a secondary market for mortgages in Canada. And the Canadian government has also (from time to time) enacted policies to encourage home ownership.

Just one example, and related to the points above, you might like to explore:

http://www.cmhc-schl.gc.ca/en/corp/about/index.cfm

So I really do not think that either of the things you mentioned were so bad in and of themselves as we have them in Canada and they worked ... I think the problem is that no one exercised restraint or adjusted the corresponding policies in the U.S. when it became appropriate to do so.

I think one of the biggest problems in the U.S., when it comes to housing, is that your mortgage interest is tax deductible which induces so many to buy so far beyond their need or means. Of course, now everyone is addicted to that 'entitlement' so it will never change.
Make America Great Again! - Trump in 2020 ... "We're a capitalistic society. I go into business, I don't make it, I go bankrupt. They're not going to bail me out. I've been on welfare and food stamps. Did anyone help me? No." - Craig T. Nelson, actor.
Woland
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Perhaps this is an area in which a quantitative difference resulted in a qualitative difference!

The link you provide is interesting, but serves, I think to emphasize that the mortgage industry in Canada has remained very carefully and conservatively managed, in comparison to the USA, both from the government and secondary-market perspectives.

I agree that tax deductability makes things look more affordable than they are.
Dannydoyle
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Ummm, it took a study to figure out things are bad? 9% unemployment and he told us it would not go above 8% if we gave him his slush fund? That is all it was you know?

It "saved" government union jobs so the union dues could be taken (in come cases automatically) and given to democratic campaign funds. The most growth we have seen is in public secter jobs. This is not a good thimg.
Danny Doyle
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landmark
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In no cases automatically taken and given without the individual's consent. Perhaps you were thinking of the stockholders of various corporations.
And the number of public sector jobs has decreased, a mistake made by Limbaugh among others.
Plenty of money was given to private industry--much more than funding for public sector jobs. It didn't result in a whole lot of jobs, though it did result in the saving of large bonuses.
It's not such a bad thing that some nurses and teachers' jobs were saved.
EsnRedshirt
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