Comments on: Christina Romer's Six Lessons http://willwilkinson.net/flybottle/2009/03/12/christina-romers-six-lessons/ The Sweet Release of Reason Thu, 09 Feb 2012 18:11:50 +0000 hourly 1 By: Vince http://willwilkinson.net/flybottle/2009/03/12/christina-romers-six-lessons/#comment-23404 Vince Sun, 15 Mar 2009 09:04:50 +0000 http://www.willwilkinson.net/flybottle/?p=3180#comment-23404 Based on the <a href="http://cboblog.cbo.gov/?p=208" rel="nofollow">CBO numbers</a>, the stimulus amounts to 2.1% of GDP over the rest of FY 2009 (stimulus is $185B over the 225 days from its mid-February signing through 9/30/09, while GDP for that period is about 225/365 x $14.3T = $8.8T). Then it's 2.8% of GDP in FY 2010, 0.9% of GDP in FY 2011, and 0.5% of one year's GDP over the rest of the 10-year projection. So there goes Frum's criticism based on Lesson One. Maybe bigger would've been better, but the stimulus gets close to its maximum rate quickly and is concentrated over its first 20 months.<br><br>I don't know enough about Lesson Two (monetary policy) to comment, and there's nothing to Lesson Six (a bad economy is bad). That leaves Lessons Three through Five, which all depend on predictions about future policy. We'll see over the coming months what the Obama administration does on fixing the financial system (#4) and trade (#5 - though I'm not even sure if that's what Romer was referring to), and over the coming years whether they cut back on the stimulus too soon (#3). Frum doesn't like what he sees in his crystal ball, but who knows what Romer thinks, what Obama is planning, or what's actually going to happen. Based on the CBO numbers, the stimulus amounts to 2.1% of GDP over the rest of FY 2009 (stimulus is $185B over the 225 days from its mid-February signing through 9/30/09, while GDP for that period is about 225/365 x $14.3T = $8.8T). Then it's 2.8% of GDP in FY 2010, 0.9% of GDP in FY 2011, and 0.5% of one year's GDP over the rest of the 10-year projection. So there goes Frum's criticism based on Lesson One. Maybe bigger would've been better, but the stimulus gets close to its maximum rate quickly and is concentrated over its first 20 months.

I don't know enough about Lesson Two (monetary policy) to comment, and there's nothing to Lesson Six (a bad economy is bad). That leaves Lessons Three through Five, which all depend on predictions about future policy. We'll see over the coming months what the Obama administration does on fixing the financial system (#4) and trade (#5 – though I'm not even sure if that's what Romer was referring to), and over the coming years whether they cut back on the stimulus too soon (#3). Frum doesn't like what he sees in his crystal ball, but who knows what Romer thinks, what Obama is planning, or what's actually going to happen.

]]> By: Vince http://willwilkinson.net/flybottle/2009/03/12/christina-romers-six-lessons/#comment-23403 Vince Sun, 15 Mar 2009 02:04:50 +0000 http://www.willwilkinson.net/flybottle/?p=3180#comment-23403 Based on the <a href="http://cboblog.cbo.gov/?p=208" rel="nofollow">CBO numbers</a>, the stimulus amounts to 2.1% of GDP over the rest of FY 2009 (stimulus is $185B over the 225 days from its mid-February signing through 9/30/09, while GDP for that period is about 225/365 x $14.3T = $8.8T). Then it's 2.8% of GDP in FY 2010, 0.9% of GDP in FY 2011, and 0.5% of one year's GDP over the rest of the 10-year projection. So there goes Frum's criticism based on Lesson One. Maybe bigger would've been better, but the stimulus gets close to its maximum rate quickly and is concentrated over its first 20 months.<br><br>I don't know enough about Lesson Two (monetary policy) to comment, and there's nothing to Lesson Six (a bad economy is bad). That leaves Lessons Three through Five, which all depend on predictions about future policy. We'll see over the coming months what the Obama administration does on fixing the financial system (#4) and trade (#5 - though I'm not even sure if that's what Romer was referring to), and over the coming years whether they cut back on the stimulus too soon (#3). Frum doesn't like what he sees in his crystal ball, but who knows what Romer thinks, what Obama is planning, or what's actually going to happen. Based on the CBO numbers, the stimulus amounts to 2.1% of GDP over the rest of FY 2009 (stimulus is $185B over the 225 days from its mid-February signing through 9/30/09, while GDP for that period is about 225/365 x $14.3T = $8.8T). Then it's 2.8% of GDP in FY 2010, 0.9% of GDP in FY 2011, and 0.5% of one year's GDP over the rest of the 10-year projection. So there goes Frum's criticism based on Lesson One. Maybe bigger would've been better, but the stimulus gets close to its maximum rate quickly and is concentrated over its first 20 months.

I don't know enough about Lesson Two (monetary policy) to comment, and there's nothing to Lesson Six (a bad economy is bad). That leaves Lessons Three through Five, which all depend on predictions about future policy. We'll see over the coming months what the Obama administration does on fixing the financial system (#4) and trade (#5 – though I'm not even sure if that's what Romer was referring to), and over the coming years whether they cut back on the stimulus too soon (#3). Frum doesn't like what he sees in his crystal ball, but who knows what Romer thinks, what Obama is planning, or what's actually going to happen.

]]> By: Pithlord http://willwilkinson.net/flybottle/2009/03/12/christina-romers-six-lessons/#comment-23402 Pithlord Fri, 13 Mar 2009 17:06:53 +0000 http://www.willwilkinson.net/flybottle/?p=3180#comment-23402 Someone appears to have kidnapped Frum and replaced him with somebody reasonable. Wasn't he the guy who thought George Bush could "end evil"? Someone appears to have kidnapped Frum and replaced him with somebody reasonable. Wasn't he the guy who thought George Bush could “end evil”?

]]> By: odograph http://willwilkinson.net/flybottle/2009/03/12/christina-romers-six-lessons/#comment-23401 odograph Fri, 13 Mar 2009 09:56:26 +0000 http://www.willwilkinson.net/flybottle/?p=3180#comment-23401 Are you really endorsing bigger stimulus Will? Are you really endorsing bigger stimulus Will?

]]> By: Paul_G_Brown http://willwilkinson.net/flybottle/2009/03/12/christina-romers-six-lessons/#comment-23400 Paul_G_Brown Thu, 12 Mar 2009 23:11:51 +0000 http://www.willwilkinson.net/flybottle/?p=3180#comment-23400 Woah. <br><br>A solid, honest, conservative critique! Repeating some points I agree with, but missing a couple of others. The Fed has engaged in quantitative easing. And statements like "this stimulus is too big", or "this stimulus is too small" always yields eventually to "this stimulus is just right!" followed by a nap and a light snack when the three bears come home. <br><br>But I digress! Woah.

A solid, honest, conservative critique! Repeating some points I agree with, but missing a couple of others. The Fed has engaged in quantitative easing. And statements like “this stimulus is too big”, or “this stimulus is too small” always yields eventually to “this stimulus is just right!” followed by a nap and a light snack when the three bears come home.

But I digress!

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