Today marked the two-year anniversary of President Obama’s economic stimulus law. But based on the reaction from Capitol Hill, there was little reason to celebrate. Rep. Jim Jordan (R-OH) held a House Oversight and Government Reform Committee hearing Wednesday morning with Heritage’s J.D. Foster, George Mason University economics professor Russell Roberts, and Stanford University economics professor John Taylor. Jordan intentionally left two empty seats as placeholders for Christina Romer and Jared Bernstein, architects of the $787 billion plan. Both declined to attend and Jordan turned down an offer from the …
According to reports, Christina Romer, Chairman of the President’s Council of Economics Advisers (CEA) is calling it quits. Why does this matter? Another ignored economist leaves Washington with a slightly tattered professional reputation to be received joyously back in the arms of her colleagues in academe having served in a glorious cause—pass the brie and chablis. Well, it matters, at least a little. It matters because the notice given means the CEA still matters. As a CEA alum, I’m encouraged that even in this Administration the outward appearance, at least, …
At Econbrowser, Dr. Menzie Chinn provides a succinct summary of my critique of CEA’s “Economic Impact of the Stimulus” report when he writes, “…these implied increments to growth rates do not jibe with the inferences drawn by Dr. Campbell — that the impact on GDP is much smaller than CEA asserts when using forecasts from the other agencies and firms.” (italics mine). My critique was that the CEA’s method for estimating the economic impact of the American Recovery and Reinvestment Act (ARRA) cannot be used to make a meaningful inference …
Albert Einstein famously defined insanity as “doing the same thing over and over again and expecting different results.” So after a $787 billion stimulus that was supposed to create (not merely save) 3.3 million net jobs but instead saw 3.4 million net jobs lost, House Democrats this week have doubled down by (barely) passing yet another $150 billion stimulus bill. Of course, if deficit-spending created jobs and growth, then the staggering $1.4 trillion deficit in 2009 would have already overheated the economy. The new stimulus bill is offensive on a …
Heritage’s Bill Beach: If the root cause of the problem is high health care costs, the White House’s solution only makes tings worse. President Obama’s health reform will impact thousands of small business owners who are creating the jobs and wages for most Americans. These taxes will hurt small businesses by keeping them from expanding and adding new jobs. It will hurt workers by stagnating wage growth or even eliminating jobs. New research from Heritage’s Center for Data Analysis reveals these new taxes could mean 400,000 employees could lose their …
Heritage senior tax policy analyst Curtis Dubay and macroeconomics policy analyst Karen Campbell have a new paper out analyzing The Job Impact of the American Recovery and Reinvestment Plan put out by Council of Economic Advisers president and vice president Christina Romer and Jared Bernstein. Dubay and Campbell write: Romer and Bernstein estimate how much government spending and tax cuts will increase production, or gross domestic product (GDP). … Romer and Bernstein, however, rely on a model based on historical data that is not comparable to current economic conditions, because …
Paul Krugman blogs: Let’s lay out the basics here. Other things equal, public investment is a much better way to provide economic stimulus than tax cuts, for two reasons. First, if the government spends money, that money is spent, helping support demand, whereas tax cuts may be largely saved. So public investment offers more bang for the buck. Second, public investment leaves something of value behind when the stimulus is over. Krugman cites no evidence for these assertions. As if just because the government doesn’t spend money on something nothing …
Throughout his 1992 campaign, then-candidate Bill Clinton promised tax cuts for the middle class. By the time he was sworn into office in 1993, though, Clinton said he would have to “revisit” his tax-cut plan and was “absolutely mystified” that the media had perceived it as a major pledge. A year later Americans punished Clinton by electing the first Republican Congress in more than 40 years. President-elect Barack Obama also campaigned on a middle class tax cut, but so far, he seems intent on not repeating Clinton’s mistake. Yesterday on …
The chances our good that The Heritage Foundation will not love everything that President-elect Barack Obama does. So let us all celebrate Obama’s strong choice of University of California at Berkeley Professor of Economics Christina Romer as Chairwoman of the Council of Economic Advisers. We specifically hope that Mrs. Romer packs three specific papers she wrote when she departs for Washington: from the abstract for The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks: “This paper investigates the impact of changes in the level …
