@Cycloptichorn,
Cyclo wrote: The ARRA bill was passed into law over 18 months before QE2 was announced, let alone the 8 month period it took to implement. So, once again, this is a sloppy statement which is simply untrue. There is no evidence that a program announced over a year and a half later kept interest rates from rising after the ARRA was passed. What's far more likely is that the economic models of Conservatives which predicted large interest rate increases were simply incorrect.
In the first place I'm not aware of any "conservative economic models" that predicted the much vaunted stimulus would raise interest rates, and (as you can easily note) I questioned Thomas on exactly that point. It is simply a Fact that, in the aftermath of the crash, the Fed was doing everything it could to inject liquidity into the financial system, and, in that environment, interest rates were bound to stay low. Longer range forces could easily have yielded an increase in interest rates due to accelerated government borrowing, however, QE2 took care of that. The fact remains that the massive increases in the money supply have indeed depreciated our currency; raised the prices of needed commodities; and contributed to the currently growing inflation. Eventual intrest rate rises are inevitable, a fact that will make our high public debt levels even more painful. Worse, the unwillingness of the Administration to put forward any restructuring of entitlements, critically needed to reduce medium and long range deficits will very likely lead to much larger increases in interest rates.
Cyclo wrote:
Quote:
Well it does appear that the "Keyensian economists" in the Administration were indeed factually wrong in predicting that their actions would restrain the growth in unemployment to 7% or 8% and that lots of "shovel ready" projects would result.
This is in large part because the initial slowing of our economy due to the recession that predated Obama taking office was far worse than initially thought -
When the underlying conditions are far worse, the solution predicated on an incorrect understanding of those conditions will be limited in effect.
Cycloptichorn
No, the obvious reason that unemployment was little effected by the stimulus is that there were few "shovel ready" projects (as the President has uncharacteristically admitted) and there was very little new private sector economic activity that resulted from the trillion dollar giveaway. The main effect was to enable the states to delay acting on their own budget crises for a year. I suppose you could argue that even this constituted some level of "stimulus", and I would agree. However it would be very difficult to argue that there was mich of an economic multiplier involved in that.
Meanwhile the Administration thoroughly spooked the energy industry with its regulatory assaults of coal derived power, new restrictions on petroleum extraction; stalling of needed pipeline projects, and other like actions. These together had a far greater negative effect than anything the stimulus did .... and none of them were really necessary.
I will, however, agree that the Obama Administration has been repeatedly proven wrong and overoptimistic on its economic assessments and forecasts of growth and employment. This has persisted throughout the almost three years of this ill-starred Administration.
Moreover the Administration's energy policies, ranging from the regulatory assault on the use of coal, to the curtailment of petroleum exploration and extraction in Alaska, and off our coasts, and the restrictions on sorely needed pipeline projects, and others - have suppressed far more beneficial economic activity than the stimulus could ever have produced. As Hippocrates said "first, do no harm"
It appears you are merely trying to play a "gotcha" game and unwilling to really think about what is being discussed.
