Comments on: File Under Shooting One’s Own Foot Off Dept. (UPDATED) http://commentsfromleftfield.com/2009/02/file-under-shooting-ones-own-foot-off-dept Wed, 08 Feb 2012 16:39:52 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Brian Fox http://commentsfromleftfield.com/2009/02/file-under-shooting-ones-own-foot-off-dept/comment-page-1#comment-49505 Brian Fox Tue, 10 Feb 2009 20:26:13 +0000 http://commentsfromleftfield.com/?p=7688#comment-49505 I'm glad someone treated this thoughtfully. The right has been playing fast and loose with a lot of numbers and being intellectually dishonest. I, too read the CBO report as implying an overall positive impact from the stimulus. A couple of question/points on the math, though... The CBO says that by 2019 the Senate legislation would reduce GDP by 0.1% to 0.3% *on net*. I'm not sure whether to read this as a forecast reduction at the end of 2019 (single point in time) vs. an aggregate (cumulative) decrease of 0.1% to 0.3% over the 10 year period. I think *on net* here probably just means compared to the CBO baseline. The CBO letter was not clear on this and did not detail their analysis. The only sensible economic way to value this proposal is to consider the overall cumulative benefit in current dollars vs. the cost. However, even if it does slightly decrease in the aggregate, it is probably worth having very slightly retarded growth over the long haul for the short term benefit during a historic recession. Also, the point is well taken that the 10 yr estimate is almost certainly a crap shoot and difficult to nail down. From a pure math standpoint, you cannot simply subtract the 2019 and 2009 GDP numbers, because the CBO analysis presents the percentages vs. the GDP baseline, which itself grows over the period (from 14.2B in 2009 to 22.5B in 2019). And the comparison needs to be made in present value terms to account for inflation. Even so, the impact (if it is indeed in the outlying years) should be much smaller than the benefit from the early years. *sigh* -- I wish the CBO would be more clear about their analysis. One thing is for certain -- the right is not bothering to check their math... I’m glad someone treated this thoughtfully. The right has been playing fast and loose with a lot of numbers and being intellectually dishonest.

I, too read the CBO report as implying an overall positive impact from the stimulus. A couple of question/points on the math, though…

The CBO says that by 2019 the Senate legislation would reduce GDP by 0.1% to 0.3% *on net*. I’m not sure whether to read this as a forecast reduction at the end of 2019 (single point in time) vs. an aggregate (cumulative) decrease of 0.1% to 0.3% over the 10 year period. I think *on net* here probably just means compared to the CBO baseline. The CBO letter was not clear on this and did not detail their analysis.

The only sensible economic way to value this proposal is to consider the overall cumulative benefit in current dollars vs. the cost. However, even if it does slightly decrease in the aggregate, it is probably worth having very slightly retarded growth over the long haul for the short term benefit during a historic recession. Also, the point is well taken that the 10 yr estimate is almost certainly a crap shoot and difficult to nail down.

From a pure math standpoint, you cannot simply subtract the 2019 and 2009 GDP numbers, because the CBO analysis presents the percentages vs. the GDP baseline, which itself grows over the period (from 14.2B in 2009 to 22.5B in 2019). And the comparison needs to be made in present value terms to account for inflation. Even so, the impact (if it is indeed in the outlying years) should be much smaller than the benefit from the early years.

*sigh* — I wish the CBO would be more clear about their analysis. One thing is for certain — the right is not bothering to check their math…

]]> By: Kyle E. Moore http://commentsfromleftfield.com/2009/02/file-under-shooting-ones-own-foot-off-dept/comment-page-1#comment-49421 Kyle E. Moore Fri, 06 Feb 2009 07:39:38 +0000 http://commentsfromleftfield.com/?p=7688#comment-49421 Actually, yeah. I just got home and saw a KOS Diarist had done the same math you did, you caught me just as I was heading over to update! Actually, yeah. I just got home and saw a KOS Diarist had done the same math you did, you caught me just as I was heading over to update!

]]> By: glasnost http://commentsfromleftfield.com/2009/02/file-under-shooting-ones-own-foot-off-dept/comment-page-1#comment-49417 glasnost Fri, 06 Feb 2009 05:36:32 +0000 http://commentsfromleftfield.com/?p=7688#comment-49417 The Washington Times article is wrong in a much more fundamental way than that. Stay with me here: the net impact of the bill over the next 10 years INCLUDES THIS YEAR AND NEXT YEAR. Got that? So we have a 3-6% increase in the next 2 years and a 0.1-0.3 net decrease over the next 10 years. Do me a favor. Please add these two numbers together. What is the bill's combined impact over the next ten years? A positive number. The net impact over the next 10 is positive. A badly written CBO blog and a dipshit Washington Times summary are producing a very nasty false rumor. Would you please update your post? K? The Washington Times article is wrong in a much more fundamental way than that.

Stay with me here: the net impact of the bill over the next 10 years INCLUDES THIS YEAR AND NEXT YEAR.

Got that?

So we have a 3-6% increase in the next 2 years and a 0.1-0.3 net decrease over the next 10 years.

Do me a favor. Please add these two numbers together.

What is the bill’s combined impact over the next ten years?

A positive number. The net impact over the next 10 is positive.

A badly written CBO blog and a dipshit Washington Times summary are producing a very nasty false rumor. Would you please update your post? K?

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