“They should at least pass a small package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester,” Obama said during an afternoon announcement in the White House briefing room. “There’s no reason that the jobs of thousands of Americans ... should be put in jeopardy.” WA PostProblem? For the umpteenth time, research is showing multipliers less than one:
A key question that has arisen during recent debates is whether government spending multipliers are larger during times when resources are idle. This paper seeks to shed light on this question by analyzing new quarterly historical data covering multiple large wars and depressions in the U.S. and Canada. Using an extension of Ramey’s (2011) military news series and Jordà’s (2005) method for estimating impulse responses, we find no evidence that multipliers are greater during periods of high unemployment in the U.S. In every case, the estimated multipliers are below unity. We do find some evidence of higher multipliers during periods of slack in Canada, with some multipliers above unity. NBER (ht to Thoma)Government spending multipliers less than one means government wipes out the economy when it continues to grow spending. What happens when government wiipes out the economy?
Obama Fails to Stem Middle-Class Slide He Blamed on BushBloombergWhere we find out Clinton (Bill) by raising taxes and cutting government spending raised the middle class income, Obama has caused the middle class to suffer a long term decline. So, I ask, why does Obama hate the middle class? Multipliers are lowest in California where Jerry Brown is also a hater of the middle class. Why are Jerry Brown and the Sacramento Jim Crows so intent on wiping out the California middle class?