http://www.openleft.com/showDiary.do?diaryId=11354
Mark Zandi s Chief Economist and co-founder of Moody’s Economy.com, where he directs the company’s research and consulting activities. His analysis “The Economic Impact of the American Recovery and Reinvestment Act, Mark Zandi – January 21, 2009” [pdf] contains the following chart showing the relative efficacy (“bang for the buck”) of different categories of tax cuts and spending measures. As can be seen, the spending measures deliver considerable more bang–particularly compared to the GOP favorites, such as making Bush Tax cuts permanent:On the flip, I present an expanded version that adds information about how these differences translate into GDP and jobs, plus a snippet of commentary from Zandi. |
Paul Rosenberg :: Stimulus Reality: Spending Creates VASTLY More Jobs Than Tax Cuts |
Drawing on figures from Dean Baker, co-director of the Center for Economic Policy and Research, in “Spending Versus Tax Cuts: Who Pays the Cost of Political Compromise?” [pdf], I’ve expanded Zandi’s table As you can see, the only tax cuts that perform respectably are the refundable rebates and the payroll tax holiday–that’s because unlike any of the others, they primarily benefit people of very limited means who will spend whatever money they get. The others will just go to people who will either pay down debt or buy another jet.
In his analysis, Zandi says:
Not surprisingly: (1) The Republicans don’t have a leg to stand on. (2) Even with control of both houses of Congress and the bully pulpit of the presidency, the Democrats haven’t managed to make this clear to the American people. |