I really like this policy and also the earned income tax credit, and we can talk about different policies like the stimulus checks as well, which I don’t necessarily oppose. I also agree that they can help during elections. However, the point I’m making is not about what to spend on, nor the overall size of spending over time, but about timing… spending too much at once- be it on right wing issue (military, corporate tax cuts) or left wing (welfare, education, health) … I don’t have strong opinions on what the US should spend more on… maybe they should spend more (or less) on the military and more (cf. left) or less on health (cf. Robin Hanson) and/or education (cf. Bryan Caplan).
As Obama’s former advisor Furman says: The first $1T of stimulus led to a great recovery, but the last $0.5T of stimulus caused a lot of inflation but only few jobs. In other words, the marginal cost-effectiveness of looser policy was bad and the stimulus should have been smaller—maybe $1 trillion instead of 2.
I don’t have strong opinions on the exact implementation of spreading things out more, I was arguing that this should probably be done using econometric models that take into account the current macroenvironment, and not just based the discussion ‘on casual observation rather than econometrics’ i.e. ‘We need to spend more on health, climate, etc. $X.0T is a nice round number’.
I really like this policy and also the earned income tax credit, and we can talk about different policies like the stimulus checks as well, which I don’t necessarily oppose. I also agree that they can help during elections. However, the point I’m making is not about what to spend on, nor the overall size of spending over time, but about timing… spending too much at once- be it on right wing issue (military, corporate tax cuts) or left wing (welfare, education, health) … I don’t have strong opinions on what the US should spend more on… maybe they should spend more (or less) on the military and more (cf. left) or less on health (cf. Robin Hanson) and/or education (cf. Bryan Caplan).
As Obama’s former advisor Furman says: The first $1T of stimulus led to a great recovery, but the last $0.5T of stimulus caused a lot of inflation but only few jobs. In other words, the marginal cost-effectiveness of looser policy was bad and the stimulus should have been smaller—maybe $1 trillion instead of 2.
I don’t have strong opinions on the exact implementation of spreading things out more, I was arguing that this should probably be done using econometric models that take into account the current macroenvironment, and not just based the discussion ‘on casual observation rather than econometrics’ i.e. ‘We need to spend more on health, climate, etc. $X.0T is a nice round number’.