> Economic activity has benefits for society at large -- we get stuff out of it, and there's a feedback loop where more people with money in their pocket means more demand, which means more people employed, which means money in their pocket, etc.
Yes, there is. However, the amount of feedback, which economists call the "multiplier" is a matter of considerable dispute. Obama's current point-woman on this has published research showing that the multiplier for much govt activity is typically less than 1. (She's saying something different now.)
> Giving money to people in lump sums (which was in fact about 40% of the bill, the bill was 40% tax cuts) is fast and simple, so it certainly has a place, but keeping people in a job is far more effective because you create externalities.
You're assuming that the person is producing something of value and at a reasonable cost..
More to the point, the original poster asserted that a job which cost $200k was worth more than just giving the person $70k/year even if we ignore such factors. (Numbers made up.)
Note that Krugman recently wrote that just giving money to unemployed people doesn't cause problems. This is in contrast to his statement in "Macroeconomics" that unemployment payments encourage people to stay unemployed longer than they would otherwise.
> That job is producing something of value to the economy, that person is gaining skills/experience leading to future employability
I'd agree, but this flies in the face of the arguments used to justify higher minimum wages.
> Counter-cyclical spending is, according to economic theory, the one point in the cycle where the government should be encouraged to spend money like they're in vegas, up 50k and hanging at the strip club. Breaking this negative feedback loop is priority #1 -- debt can be paid back later,
I know the theory. However, it assumes that govt does something that the US govt doesn't do, namely save during the other part of the cycle. Given that, it's unclear that the spending during the down part makes sense.
To put things in terms of another HN argument, it's unhealthy to eat the calories that you'd need to train for the Ironman if you're not actually training for the Ironman.
Yes, there is. However, the amount of feedback, which economists call the "multiplier" is a matter of considerable dispute. Obama's current point-woman on this has published research showing that the multiplier for much govt activity is typically less than 1. (She's saying something different now.)
> Giving money to people in lump sums (which was in fact about 40% of the bill, the bill was 40% tax cuts) is fast and simple, so it certainly has a place, but keeping people in a job is far more effective because you create externalities.
You're assuming that the person is producing something of value and at a reasonable cost..
More to the point, the original poster asserted that a job which cost $200k was worth more than just giving the person $70k/year even if we ignore such factors. (Numbers made up.)
Note that Krugman recently wrote that just giving money to unemployed people doesn't cause problems. This is in contrast to his statement in "Macroeconomics" that unemployment payments encourage people to stay unemployed longer than they would otherwise.
> That job is producing something of value to the economy, that person is gaining skills/experience leading to future employability
I'd agree, but this flies in the face of the arguments used to justify higher minimum wages.
> Counter-cyclical spending is, according to economic theory, the one point in the cycle where the government should be encouraged to spend money like they're in vegas, up 50k and hanging at the strip club. Breaking this negative feedback loop is priority #1 -- debt can be paid back later,
I know the theory. However, it assumes that govt does something that the US govt doesn't do, namely save during the other part of the cycle. Given that, it's unclear that the spending during the down part makes sense.
To put things in terms of another HN argument, it's unhealthy to eat the calories that you'd need to train for the Ironman if you're not actually training for the Ironman.