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SEPTEMBER 9, 2009 | Commentary by NATHAN BENEFIELD
Whoops, We Were Wrong...
One of our goals at the Commonwealth Foundation is to predict the effect of proposed public policies. Most of the time, we are proven correct, and humbly announce, "We told you so!" But sometimes, our predictions miss the mark. Case in point: in a November 2008 commentary, we predicted "Obama's presidency will likely be less radica
MAY 29, 2009 | Commentary by ELIZABETH STELLE
Government Intervention Prolongs Recessions
Recessions are a tough time for all—many lose their jobs, family incomes shrink, and budgets are squeezed. But recessions are natural and, in the long-run, foster a stronger economy. It is important that policymakers recognize the ups and downs of the economy, and the lessons from past recessions, so as to not over-react to the curre
MARCH 17, 2009 | Commentary by NATHAN BENEFIELD
Free Markets: An Unknown Ideal
President Obama, Governor Rendell, and many in the media have been echoing a similar refrain recently, "Conservatives had their chance. We tried free markets, and they failed." When exactly they think citizens enjoyed free markets is unclear, but it certainly did not occur under the presidency of George W. Bush or under Gov. Rendell.
Recent Blog Posts
AUGUST 31, 2010
The Imagined Effect of the Stimulus
Louis Woodhill writes on Real Clear Markets how the CBO's estimated impact of the stimulus is a fantasy.
In fact, the CBO readily admits it is simply plugging new spending numbers into the same model it used before the stimulus was enacted (HT Center for Fiscal Accountability):
CBO director Doug Elmendorf laid out the CBO's methodology pretty clearly, describing his office's frequent, legally-required stimulus reports as "repeating the same exercises we [already] did rather than an independent check on it." CBO tweaks its models on the input side, he says—adjusting, for example, how much money the government has spent. But the results the CBO reports—like the job creation figures—are simply a function of the inputs it records, not real-world counts.
To simplify, lets say the CBO model predicts that for every $1 million spent, 4 jobs are created or saved (the model itself is more complex than this, but yields a similar result).
That is, $800 billion = 2 million jobs or $600 billion = 1.5 million jobs.
Prior to the stimulus being enacted, the CBO estimates were based on how much money was expected to have been spent. The updates plug how much money was actually spent into the model.
Some will defend the model as sound, but it does not represent a measurement of the actual impact of the stimulus.
posted by NATHAN BENEFIELD | 11:03 AM | 0 comment
AUGUST 6, 2010
Quote for the Day on Stimulus Spending
Yesterday, I tweeted Dan Mitchell's blog post, which in turn cited Richard Rahn's article on the evidence of "stimulus spending" vs. limited government on growing the economy. Mitchell has since responded to government-spending defenders - post one; post two - the second contains my "quote for the day."
Thompson also writes that, “Our unemployment picture is a little more complicated than ‘Oh my god, Obama is killing jobs by taking over the states’ Medicaid burden!’” Since I’m not aware of anybody who’s made that argument, I’m not sure how to respond. That being said, jobs will be killed by having Washington take over state Medicaid budgets. Such a move would lead to a net increase in the burden of government spending, and that additional spending would divert resources from the productive sector of the economy.
Snarky...and true.
posted by NATHAN BENEFIELD | 03:30 PM | 0 comment
AUGUST 2, 2010
What Happens to PA Budget without FMAP Money
Gov. Rendell is supposed to meet with lawmakers today to discuss options if Congress doesn't approve the $850 million in federal FMAP funds.
Pete DeCoursey (subscription) breaks down the effect on welfare spending, which I try to summarize in fewer words, using a chart breaks down the spending.
|
Since 2008-09 |
With FMAP Funding |
Without |
|
PA Welfare Spending Increase |
$2,400 |
$2,400 |
|
State Sources |
-$750 |
$100 |
|
Federal Sources |
$3,150 |
$2,300 |
|
(in millions) |
||
The bottom line is, even if Pennsylvania does not get the federal Medicaid money, the cuts have to come from elsewhere. The state can't change eligibility and continue to receive stimulus funds, because of the "maintenance of effort" requirement.
posted by NATHAN BENEFIELD | 09:47 AM | 0 comment
