Without a "control economy" to test against, how can the "dismal science" known as economics even hope to follow anything resembling the scientific method?
Prove the stimulus failed.
Prove the stimulus worked.
How can you do either? What evidence have you other than "what ifs" and "theory contests"?
I agree with your sentiment, but economics, like cosmology/astronomy is not an experimental science. So we are stuck making observation from historical evidence and of course that never quite applies to the current situation.
I think we should ask the proponents, that if government stimulus is such a brilliant way to encourage economic activity, then why don't we do more and do it all the time ? Seriously - why don't we just add an extra trillion or two per year of stimulus into the foreseeable future if it's so great ?
The obvious answer is that it is not great at all. It causes radically inefficient use of goods and services and creates debt which limits growth and if monetized causes inflation. The creation of public debt makes funds unavailable for private enterprise. The downside outweighs any positives, but since the negative outcomes are in the future, and the positives come immediately, then people with short attention spans and no ability to delay gratification believe it's wonderful. Generic economic stimulus is for the Charlie Sheen mentality. Bernanke seems to believe he is a warlock, but he's got "tiger blood" running through our economic veins.
The painful thing tho' is to read these sorts of juvenile analyses from otherwise intelligent persons ....
One of my grants came from ARRA funds.
It has covered the education of two PhD students, resulted in 2 peer reviewed papers, a patent which will like be developed into a company and new research which will support more graduate students.
one of those students is already employed at another university and the other is likely to finish soon with a job at a pharma company.
My experience is that the funds were useful in doing what they were designed to do, stimulate the economy.
We can agree that the creation of newly minted productive phd's is a valuable thing, but there can be no rational analysis of the investment without accounting for the costs. In economics we must evaluate any outcome in comparison to the value of the alternative use of those funds.
Creating vast amount of stimulus and quantitative easing based on debt is inflationary and the net effect is that we make goods and services less affordable, we make imports more expensive, we reduce the value of currency, bonds and anything else denominated in our currency, we make private borrowing more onerous, and we reduce growth so long as debt service is required.
In the private economy all "stimulus" is in the form of investment where the stimulator has a rational expectation of making a profit, and the investor is putting his own assets at risk which motivates prudential oversight. The profit equation in a free market ensures that there is proportionate and efficient value to the customer. In the public sector these methods and motives are lost so we throw money at ridiculous propositions that are clearly not the best, sometimes even terrible use of resources, and no one is motivated greatly to ensure proper oversight.
The other loony argument is that the economy is improving, therefore stimulus was the cause, "post hoc ergo propter hoc" much ?
In the current fiscal year we are arguing about a $100B vs $60billion cut in a projected $1675Bln annual deficit. That annual deficit amounts to $5400 of debt per person accumulated in 2011 alone. $21k for a family of four. Make your own judgment about this path. Stimulus is part of that deficit.
I suppose I'm complaining about the ship design from the deck of the titanic.
http://bpp.mit.edu/daily-price-indexes/?country=USA
“We’ve been very, very clear that we will not allow inflation to rise above 2 percent. We could raise interest rates in 15 minutes if we have to." - Bernanke. I wonder why the Fed didn't control inflation in the mid-1970s through early 1980s ? They must have had much dumber Fed chairmen back then, or else perhaps Bernanke is "100% certain" that he is a warlock.
From the poster who claimed "Hover opposed government intervention and wanted to focus on balancing the budget." And many other lies. Stop lying about economics and history, lomiller. You only embarrass yourself. Because an excellent case can be made that unemployment now is just as bad as when you claim it peaked. The only reason that the government is able to claim the unemployment rate has dropped a little is because they've monkeyed with the underlying numbers and basis. Reduced the size of the working population. As I've already noted on this thread several times. The only thing the stimulus has done is deepen and lengthen the recession, just as FDR's socialist actions deepened and lengthened the Great Depression. And what is now clear as day is that liberals like you are incapable of learning from history. You will distort and lie to the day you take your last breath. It's your nature.