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Barro who you seem to prefer has the minority view when it comes to economist in this area. Others such as Paul Krugman, Martin Feldstein, Mark Zandi, and Robert Reich have a different view than Barro. As I have previously pointed out one dollar invested in infrastructure has a return of $1.59 in GDP growth. While the most effective tax cut, a payroll tax holiday, only returns $1.29, while most tax cuts don’t even return 50 cents.

Now does that mean we should do this forever? No, that would be crazy and I do not think that Barro is even implying that. This is what is needed to jump start the economy and to get it functioning again. How does a economy or a country function if it's citizens have no jobs or their wages continue to fail behind inflation? Once again all of this is covered in Moody's report

Assessing the Macro Economic Impact of
Fiscal Stimulus 2008



Greg - let's say that you are correct in your assessment. Why then, do you think it is good to wait until over two years from now for the majority of these so-called stimulus dollars to kick in?

John Pepple

Congratulations, Greg. For once you've managed to post a comment that is fairly short. Let's keep it that way, ok?

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