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Thread: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    Quote Originally Posted by political_signs View Post
    this is a good thing! finally a substantial change is finally being noticed. although i do agree with some on this thread there are still too many who are unemployed... but this will change as time goes by. i predict that by next year things will be looking a lot better ;]
    Let me point out once again, this excerpt from the report:

    Although CBO has examined data on output and employment during the period since ARRA’s enactment, those data are not as helpful in determining ARRA’s economic effects as might be supposed because isolating the effects would require knowing what path the economy would have taken in the absence of the law. Because that path cannot be observed, the new data add only limited information about ARRA’s impact.
    What this report can not tell you is, how many jobs would have been created in the economy over the last year and a half if the stimulus was never passed. Without that information, those numbers are meaningless.

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    Quote Originally Posted by Boo Radley View Post
    How is it obvious?
    It's obvious because it isn't contained in the report. If it were requested, it would be there.

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    Quote Originally Posted by Grim17 View Post
    It's obvious because it isn't contained in the report. If it were requested, it would be there.
    OK. My mistake. I miss read.

    AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    So we are on the path to lollipops and sunshine? Well, not so fast people.....


    Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930s-style Depression, Gluskin Sheff economist David Rosenberg said Tuesday.



    Writing in his daily briefing to investors, Rosenberg said the Great Depression also had its high points, with a series of positive GDP reports and sharp stock market gains.

    But then as now, those signs of recovery were unsustainable and only provided a false sense of stability, said Rosenberg.

    Rosenberg calls current economic conditions "a depression, and not just some garden-variety recession," and notes that any good news both during the initial 1929-33 recession and the one that began in 2008 triggered "euphoric response."

    "Such is human nature and nobody can be blamed for trying to be optimistic; however, in the money management business, we have a fiduciary responsibility to be as realistic as possible about the outlook for the economy and the market at all times," he said.

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    okay wow... so didnt see your cnn list there GRIM17 uhhh well some of the things on that list are really essential. the whole going green thing im so for it. it helps out the environment as well as the wildland fire management on forest service lands. gotta keep the forests alive somehow.

    $75 million for "smoking cessation activities."
    idk even know what it is nor am i going to google it. it just sounds retarted.

    $600 million to buy hybrid vehicles for federal employees.
    wow... really? really? well at least we save more money then the government spending money on gas so theres a lot more money back in the pocket ;]

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    Quote Originally Posted by Grim17 View Post
    Let me point out once again, this excerpt from the report:



    What this report can not tell you is, how many jobs would have been created in the economy over the last year and a half if the stimulus was never passed. Without that information, those numbers are meaningless.
    ahhhh slab just when i got all excited that something good was happening -.- i hate politics yet im addicted to it. fml

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    Quote Originally Posted by political_signs View Post
    ahhhh slab just when i got all excited that something good was happening -.- i hate politics yet im addicted to it. fml
    I know how you feel. Information can be spun in either direction and I keep that in mind when reading things like this. That also goes for reports that support my political beliefs also. When all else fails and I can't determine which side has it right, I fall back on history.

    I believe the CBO itself, is one of the most non-partisan and trustworthy agencies in the government. The reason for that is because they only allowed to do, what they are told to do, and aren't allowed to expand on their scope. If they were allowed to expand on things, then partisan preferences would come into play. That's why it is so important to read what factors the CBO uses to determine their results, what factors are not considered, and how varied the actual results could be based on those considerations.
    Last edited by Grim17; 08-25-10 at 03:51 PM.

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    Quote Originally Posted by Grim17 View Post
    They are given parameters by the ones who make the request. They are told what to include in their reports, what to omit, and often told which sources they can use as a basis for them.

    The CBO is not allowed to broaden the scope of a report, even if in doing so, it would significantly alter their findings.
    Although CBO is given the specific question to answer, CBO is not told how to answer that question. CBO's response is independent.

    That's why their reports include so many "what if's" and explanations for their findings.
    CBO, like any entity trying to make a forecast, has to work with incomplete information, make assumptions about the current and future environment, etc. Laying out scenarios and mentioning variables that might have a significant impact makes good sense.

    We saw this with Obamacare. Their reports prior to it's passing that were requested by the administration and democrats on capitol hill, painted a very rosy economic picture for America if the legislation were enacted. After the bill was passed, they were requested to do several other, more broad studies on the Obamacare bill, and every one that has been released so far, has contradicted or greatly reduced the positive benefits they reported initially. That's because their scope was severely limited before by the administration.
    As more information becomes available, initial ideas can change. Long-range forecasting is very difficult and imprecise. For example, if one is trying to project the budget deficit for 2020, one needs to have a reasonable idea concerning the macroeconomic environment.

    What will the GDP be in 2020? Historically, one can assume at least one and perhaps two additional recessions from now until then. But how deep? Keeping current law fixed, one could then estimate revenue and expenditures? But what if there is a geopolitical shock? Certain expenditures might rocket well beyond what current law would have them. What will interest rates be? Given the nation's sizable and growing debt, one needs to understand the structure of the nation's debt and relevant interest rates in order to assess interest payments.

    If one looks closely at CBO's forecasts, one finds that beyond the short-term, CBO reverts toward what is believed to be stable state figures i.e. nominal GDP grows by 4.4%, 4.3%, and 4.3% in 2018-20; Real GDP grows by 2.3%, 2.2%, and 2.2% in that timeframe; Core CPI is at 2.0% each of those three years; the unemployment rate is at 5.0% during those three years, etc.

    Why? Because errors are likely to be smaller if one assumes a stable state toward what are believed to be sustainable figures.

    Nonetheless, sizable errors could still result. For a simple illustration, let's say tax revenue amounts to about 18% of nominal GDP under the current tax law framework. Nominal GDP was about $14 trillion in 2009. Over the past 20 years, nominal GDP expanded at an average rate of 4.8% per year.

    What would happen to tax revenue if annual growth amounted to +/- 0.5% from the above average?

    5.3% annual growth: $4.45 trillion tax revenue
    4.8% annual growth: $4.22 trillion tax revenue
    4.3% annual growth: $4.00 trillion tax revenue

    In short, average annual growth of +/- 0.5% from the 20-year annualized figure would create a difference of $450 billion in 2020 revenue.

    Needless to say, CBO's models are more complex. Nonetheless, assumptions toward a stable state are made as one extends farther out along the time horizon.

    In reality, CBO has erred on the side of optimism (lower net costs/greater net benefits/policy makers will deliver on program constraints). That is a human bias, not something that is unique to CBO. In practice, that has led to CBO's often underestimating the growth of major programs. The recent "doctor's fix" in which both parties overwhelmingly voted to waive a very modest budget-saving mechanism provides just the latest example of policy makers choosing not to be bound by fiscal constraints. Hence, an approach that followed the current law would have missed the extra increase in the budget deficit that resulted under a bipartisan move to avoid modest fiscal constraints.

    Indeed, given past history, CBO should probably print a disclaimer highlighting budget constraints under existing law and explaining that policy makers have typically failed to remain bound by those constraints.

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    Quote Originally Posted by Grim17 View Post
    What this report can not tell you is, how many jobs would have been created in the economy over the last year and a half if the stimulus was never passed. Without that information, those numbers are meaningless.
    Not exactly. It cannot provide a decent estimate only if it relied on output and employment data. However, by using revenue and spending data, it was able to make estimates using its various models.

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    Re: Stimulus Boosted Jobs in 2nd Quarter, CBO Says

    Don-

    Are these tallies on jobs calculated using the White House's revised method of counting job creation?

    http://www.debatepolitics.com/genera...obs-count.html

    The Obama administration is changing the way it counts jobs created or saved by stimulus spending in a way that will make the programs look far more successful.

    Under the old rules, only jobs that were actually newly created or not lost because of stimulus money were counted. Now the administration plans to count all jobs for projects funded by stimulus money—even if that job already existed and the person was never in danger of losing the job.
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