Yesterday,
in a post giving three very good reasons stimulus spending is better than Obama's aborted tax cut plan, I said,
There is a less than 1:1 ratio for spending and tax breaks dollars, particularly in a stimulus situation. I'd be happy to talk about the long term effects of reduction of restrictive taxes, but the whole reason we're spending money now is to see immediate effects.
I can assume it took 2008 Nobel Prize for Economics laureate Paul Krugman about 3 hours to understand my genius before coming out with a
post of his own telling his readers,
Bang for the buck also heightens the contrast between effective and ineffective stimulus policies. Stay with c = 0.5, t = 1/3, and look at the effects of a tax cut; the multiplier is 0.75, half that for public investment, but bang for the buck is 1, only 1/3 that for investment.
You might think it hurts to be this fucking good, but I assure you, dear readers, it only tickles a little bit.
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