Saturday, 31 January 2009


Are we stimulated yet?

Two great posts (and a scary graphic) from Suitably Flip:
Stimulus, Illustrated

So how big is the resulting $1.2 trillion [expenditure+interest] [stimulus] spending package? Big enough to dwarf any government program in history, even after adjusting for inflation. It’s bigger than the New Deal and the Iraq War combined. The interest alone will be costlier than the Louisiana Purchase or going to the moon. The $18 billion in bonuses paid legally by private Wall Street firms in 2008 - decried by the President as “shameful” - is vanishingly small in comparison (smaller even than the bill’s incremental food stamps expenditures).
What else can we get for our $1.2 trillion?
Excusing employers from... [the employer’s share of the payroll] tax would cost an estimated $455 billion per year (ignoring the growth effect of removing hiring disincentives).  With $1.173 trillion to play with, you could fund a payroll tax holiday for more than 2.5 years...
Extrapolating from estimates by Heritage’s Center for Data Analysis, a 1-point change in the payroll tax rate ratchets the pace of job creation by 147,000 per year.  Eliminating the employer-side payroll tax completely would be a 7.65-point reduction.  ...Using that as a general guide gets us to 1.12 million incremental jobs per year.

Over 2.5 years, that's good for more than 2.8 million new jobs.

Via:  Joanna

Posted by: Old Grouch in Linkage at 21:38:06 GMT | No Comments | Add Comment
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