Monday, August 22, 2011

Separating economic myth from reality

This analysis is worth reading in detail, but let me summarize:

1) Taxes have been going down and down, not up and up, historically speaking.

2) The stimulus did work -- as far as it was funded.

3) The stimulus was too small -- but not as small as we think, considering Obama's payroll tax cut (which was not part of the stimulus, so ProPublica is muddling things here.)

4) I'll quote this one verbatim since yous guys needs to understand it:

The stimulus was all projects.

Nope. The Recovery Act as passed was estimated to cost about $787 billion. More than a third of that was tax cuts, and another third was entitlements, such as unemployment benefits and Medicaid assistance. Of the $275 billion in spending by federal agencies, less than $200 billion was dedicated to projects.

The projected cost of the Recovery Act is now $830 billion, largely because of the qualification of more people qualifying for entitlements and the popularity of some tax credits.

5) The stimulus will have a lasting legacy.

6) The stimulus, being a combination of tax cuts, direct aid to states' budgets, and projects, has not been rife with waste, fraud, and abuse as alleged.

7) Infrastructure spending is important, but not all-important. (Duh.)


By Michael Grabell
August 18, 2011 | ProPublica

No comments: