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Obama’s New Old Deal

Posted by rightwinger on December 8, 2008

FDR’s New Deal made the depression longer and worse.  Guess what?  Obama thinks FDR made the economy better.  Pay off your bills folks because things are about to get a LOT worse thanks to Obama’s New Old Deal.

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more about “Obama’s New Old Deal“, posted with vodpod

And that’s what is so frustratingly weird about Obamanomics and the plan for hundreds of billions, if not trillions, of dollars in “stimulus” spending. If the goal is to turn around the economy as quickly as possible, why would we turn to the same economic playbook that America ran in the 1930s and Japan in the 1990s? In both cases, massive government spending failed to bring back prosperity. And it’s unlikely to work this time, either. Economists Susan Woodward of UCLA and Robert Hall of MIT are dubious. In their cowritten blog, the duo opined that “timing may be a problem . . . Complicated projects take time to ramp up to high spending and employment levels. . . . All of these proposals for stimulating state and local spending suffer from a common problem—they will end up generating employment for highly specialized businesses and workers, rather than stimulating economic activity more broadly. A large-scale infrastructure program will drive up the profits of the limited number of firms.” That conclusion dovetails nicely with a 2005 study, “What Are the Effects of Fiscal Policy Shocks?” which looks at U.S. economy policy since 1955 and concludes that “a deficit-spending shock weakly stimulates the economy.”

Read the article for yourself.


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