Recovery or Not? And How?
NYU economist Mario Rizzo adds some good sense to the discussion of whether, as Paul Krugman contends, President Obama’s policies are making the economy recover. A taste:
[W]hat is the mechanism by which about $70 billion in extra spending (the amount of the total package now spent) reduces the rate of increase in unemployment and output in a $14 trillion economy? If my advanced arithmetic is correct this is ½ of 1 percent of the GDP. What kind of Super Multiplier is that?…Just a couple (or so) weeks ago President Obama said that not enough of the stimulus had been spent yet and so it was too early to expect results. But mirabile visu! The Almost Recovery has appeared. (It seems more like political opportunism instead.)
There’s lots more. No has done more to expose the analytical nonsense about the recession and remedial policies than Rizzo at ThinkMarkets.
