James Pethokoukis

Harvard study: Obama stimulus should have focused more on tax cuts

October 28, 2009

Now they tell us. A new NBER paper from Harvard’s Alberto F. Alesina and Silvia Ardagna (“Large Changes in Fiscal Policy: Taxes Versus Spending”) makes the case for tax cuts over spending as stimulus:

Romer: Unemployment likely to remain “severely elevated”

October 22, 2009

Watch CEA chair Christina Romer manage voter expectations:

Consistent with the recent cyclical pattern, the unemployment rate is predicted to continue rising for two quarters following the resumption of GDP growth. Whether this happens and how high the unemployment rate eventually rises will obviously depend on the strength of the GDP rebound. …  With predicted growth right around two and a half percent for most of the next year and a half, movements in the unemployment rate either up or down are likely to be small. As a result, unemployment is likely to remain at its severely elevated level.

WH econ adviser: Job market is really bad

October 20, 2009

Listened to an interesting talk today by Jared Bernstein, chief economist to Vice President Joe Biden, at a New America think-tank conference on job creation. A few observations:

Follow the Japanese example on stimulus

October 16, 2009

The new Japanese government is redirecting the country’s stimulus plan (WSJ):

Zandi: Unemployment headed to 10.5 percent

October 12, 2009

Moody’s Economy.com economist Mark Zandi likes the stimulus (via Fox News) but still thinks unemployment is headed higher. In his own words:

Stimulus vs. Unemployment

October 7, 2009

Correlation isn’t necessarily causality. Then again

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A different kind of “second stimulus”

October 6, 2009

Larry Kudlow speaks or, rather, writes:

As for the second stimulus package, here’s my plan: Go for growth. Reduce tax rates to provide growth incentives, something Team Obama has avoided like the plague. Cut the top corporate tax rate from 35 to 25 percent, and accompany that with a small-business tax cut from 35 to 25 percent. And leave the Bush tax cuts alone. Don’t let them expire in 2011. That’s cap-gains, dividends, and the top personal rate.

A second stimulus?

October 5, 2009

A NY Times story by my pal John Harwood hints at a second stimulus package may be brewing:

Why the US budget deficit is worse than you think

September 25, 2009

The great Dan Clifton of the Strategas Research finds this gem:

Douglas Elmendorf, director of the Congressional Budget Office, told the National Economists Club that today’s deficits are more troublesome than in the early 1980’s. Projected deficits are twice the deficit in the early 1980’s but more importantly there is a growing disconnect between current law and provisions set to expire which will eventually be extended. Most notably there is (and will be) growing pressure to extend the expiring stimulus provisions in addition to the usual expiring provisions.

McCain and stimulus: a counterfactual

September 7, 2009

From Brad DeLong:

Had John McCain won the presidential election of 2008, at the start of 2009 he would have in all likelihood proposed a trillion dollar fiscal stimulus bill–3/4 tax cuts and 1/4 aid to states–and he might have picked Tim Geithner for his Treasury Secretary. Democrats would have called for fewer tax cuts, more state aid, and some government infrastructure spending initiatives in the fiscal policy mix, but the need for the government to cushion the recession would have brought them into line. When Obama took office he bid $800 billion for his fiscal stimulus bill–about 1/3 spending, about 1/3 aid to states, about 1/3 tax cuts–thinking that would be a plan that would win broad bipartisan assent. And he was wrong.