Don’t Ignore Costs of “Stimulus”

 

Newscom

Newscom

Shocking new economic research has shown that receiving large gifts from the federal government is actually beneficial to states.

That is not such a shock, is it? Another non-shock is that pro-stimulus journalists have misinterpreted studies to use them as evidence for national stimulus benefits.

The studies are econometrically sophisticated, but stem from a simple idea: If we compare states that received greater federal transfers to states that received smaller transfers, we can estimate the benefit of transfers.

Evaluating a national policy by comparing state-level benefits cannot capture national-level costs. Who will bear the burden of paying back the higher debt? Which private-sector investments will be crowded out by greater federal stimulus? Which political interest groups will gain power over the electorate from steering more money to their constituents? State-to-state comparisons make no attempt to answer these questions.

LEARN MORE:

Research Review: What Can Be Learned from Local Multiplier Estimates?

Source material can be found at this site.

In Case You Missed It:  New Report Shows Why Congress Must Address National Debt
Posted in Financial and tagged , , , , , , , .

Leave a Reply

Your email address will not be published. Required fields are marked *

Optionally add an image (JPEG only)

 

This site uses Akismet to reduce spam. Learn how your comment data is processed.