>She reminds me of a question I have meant to take to the list for a
>while. What do we think has been the short-term positive effect of the new
>"Bush Keynesianism". Please don't take this as an endorsement for Bush
>policies. I just mean to ask where would we be without the massive deficit
>spending increases and huge boost in liquidity. There seems to be some
>statistical evidence that, a little less than a year ago, the market was
>jogged out of the "anti-bubble" pattern it had been following since 2000.
>This may or may not have anything to do with fiscal or monetary stimulus.
>Obviously last month there was a slight pickup in jobs. It leaves me to
>wonder what the hell the economy would look like if the money hose hadn't
>been turned on full blast.
>
> The second question is how much of that money injection was wasted and
>what, given the extraordinary amount of stimulus, might have been
>accomplished with better policies.
We'd be in the soup without the stimulus. But the bang for the buck is very low, given the upward skew of the tax cuts. Aid to the states and boosts in unemployment insurance would have been a lot more powerful.
Doug