Carla,

Can you clarify. It sounds like the the Legislative Review Office was saying that they could not assess the Bill because their model does not fit the current situation?

In February, Democrats claimed their state stimulus package (Go Oregon!) would create 3,000 jobs. What economic model do you think they used?

Tom:

That's part of the point. If the Legislative Revenue Office can't use the necessary models for this bill, it's specious of Hanna to claim this big jump in jobs from it. He can make up whatever numbers he likes..but if they can't be properly checked by a third party, then there's no reason to buy it.

Add to that the fact that they'll have to slash the budget even deeper, thus throwing us deeper into recession--it doesn't make sense that those jobs will be forthcoming as Hanna is claiming.

Please stop repeating the myth that the budget is being slashed. It isn't true.

The 2007-09 Legislatively Adopted Budget was $47.9 Billion. (source Oregon Blue Book)

The Governor's proposed budget for 2009-11 is $54.168 Billion. (source Governor's office)

That is a 13% INCREASE no matter how you view the world.

A 13% increase in Government spending may not be as big a jump as the Democrats were hoping for, but it isn't a 'slash' or even a reduction.

State and local governments expect a 20% increase in money each biennium. Anything less than that and they call it 'slashing the budget.'

carla,

You seriously need a few lessons in economics.

Please dont blog about job creation when you obviously dont know crap about it.

Keynsian economics is old news.

Hello! Govt spending is our money. That means that you feel the govt knows what to do and the right things to put money into more than you do.

Now i can believe that you are too moronic to know how to spend your own money but the rest of us would rather not be taxed into poverty so the govt can create a couple of jobs.

"taxing yourself into prosperity is like trying to lift yourself out of a bucket by the handle"

Actually, "job creation bills" area means to enhance politicians' chances of re-election. That means that so long as you think jobs were created, the politicians come out ahead.

Bob Tiernan Portland

Carla:

I'm confused as to why you keep linking to CBPP as if it were the final word on all of this. It's no more authoritative than someone at Cato finding that massive Keynesian spending is not the solution.

Carla,

Maybe you should explain to people how overwhelmingly liberal the folks are who serve on the OTIM.

Objective? I don't think so.

Dale and Carla,

Dale I agree with you. Carla doesnt have a clue on economics.

I dont know if they pay her to blog but Blue Oregon shouldnt pay her much if they do.

Same tired arguments. lets tax and then spend that will do it.

Like Dale said, Get a clue take an economics course before you start talking about something you know nothing of.

what even is your educational background? liberal studies? women studies? ecology?

how about focusing on a topic that you may have some knowledge on.....if there are any topics like that.

I have seen your posts and read almost all of them. I havent seen an intelligent word in any of them.

Dan

KenRay. Let me explain this to you.

Say you're employer (the government) goes from 100 employees to 103 employees (increase in population served). And employee health care costs increase from $500/employee to $600/employee per month (inflationary cost of services provided by state). That's a total increase to your employer just to maintain the current employee benefits (the state budget for current service cost) from $50,000/month to $61,800/month.

But lets say your employer only has income of $55,000 (collected tax) to spend for health care this year (Bi-ennium). That's still a 10% increase in money available for health care, but its still way short from maintaining what the employees benefits (state services) have been.

So even though the employer has $55,000 available for health insurance, which is more than they had before, the employer (government) only has the following options....

1. Lay off 11 of the 103 people and maintain the same health care for the remaining 92 (cut some people off of government services entirely and close whole programs);

2. Keep all or most of the 103 people but cut their benefits and/or salaries, or increase their co-pays(Cut school days, reduce salaries, make same percentage cuts in all programs)

3. Increase prices (increases taxes) to customers (taxpayers) to make up the difference so all health care can be maintained for all 103 employees.

Most employers, and the government, will use all three of these strategies. But regardless, the $55,000, which is admittedly an increase in funds available, can, in no way, cover the cost to maintain current benefits to the increased number of employees.

Does that help?

Is there some sort of an adult version of Sesame Street for conservative pedants and the word of the day today was "Keynesian"?

No, it's just that the sort of policies that Carla and many other "progressives" support are widely understood as having been derived in large part from the thinking of John Maynard Keynes.

If you like, we can call it "snerglegraf economics" instead so you don't have to pinch your nose every time some "conservative pedant" employs a common term, though I'm not sure that will really further the discussion at all.

I'd also caution Dan and others and remind them that it's possible to disagree with people without personally insulting them. Grow up a little, hm?

Or if you think they're wrong, feel free to show why with sources.

Carla: Well, here's a couple of links to Cato, wherein they argue quite the opposite of what you're arguing -- namely that increased government spending doesn't help the economy as much as some might claim. And here is an interesting (if sadly un-developed) argument that links the stimulus to Garrett Hardin's "Tragedy of the Commons" and makes a certain amount of sense.

At some point it comes down to a "he said/she said" sort of situation and I'm under no illusion that I'll at some point convert you into a supporter of free markets. That being said, I often find it helpful to take a peek at what people I disagree with are saying (and trying to avoid the temptation to seek out the most absurd and extreme voices in order to reinforce my own stereotypes).

Dear Jim:

Could you find a new source for your bon mots? That little anti-progressive "tax and spend" phrase is stale, trite and played out. Carl was sent home. Find someone new to quote.

Yours Truly for Original Expressions, rw

I'm curious however what will happen if the economy turns around, especially before the end of the year. Will any of that spending be credited by these same Cato cited economists?

Well, you're asking me to read both the future and other peoples' minds, which I can't do.

If I were to hazard a guess, however -- and mind you, this is pure speculation -- I would think that some credit might be given to some of Obama's economic policies while at the same time looking for other factors in the economy that might also have been at work. Economies, after all, aren't monolithic.

I suppose I could post the opposite question: if the economy recovers by the end of the year, will those who support Obama give equal time to competing explanations, or will they hold fast to the narrative that says "Obama fixed everything"?

I guess only the future will tell.

Mr. Harris:

I understand what you are saying quite well. My point still stands: Don;t call it "slashing the budgets." If the previous post had said that the budget is up 13%, but the legislature was hoping to increase it by 20%, then we'd have a little more honesty in the discussion. As long as someone starts out saying something like "Budgets are being reduced," when I know this to be disingenuous, It makes it hard for me to find any other statements made by that source to be credible.

If your point was that Public Employee's health care and benefits costs per employee far exceed what can be sustained in the real world, then I agree with you.

When the state agencies take pay cuts (like me), lose 401K match and have to do their own retirement saving (like me) then I'll know they're serious about 'shared sacrifice'. Until then, leave my wallet alone.

Oh, and I understand quite well that government is part of the economy. Unfortunately, right now it is becoming a bigger part of it. It needs to be smaller. Government cannot create wealth. the best that Government can do is create the conditions where business and individuals can prosper.

Government can spend only by either confiscating money or by borrowing it. This year the US will be in deficit spending starting Sunday, the earliest in history. Think about it. Everything after Sunday is on your children's credit card.

Believe me I know that the government is part of the economy. A deleterious one.

I have a better idea--let's borrow $175 million for a plan that will create 16 jobs...oh, wait...

I knew when I posted that about benefits I would hear this one. Talk about a red herring.

Private industry offers what is competitive and will allow it to stay in business. This means that wages, like income, can fluctuate. They are adjusted to a level that can be sustained and stay in business while keeping costs low enough to compete with other businesses and other countries. This is the real world. Employers can't just increase benefits without regard to the competition.

Government doesn't have to worry about staying in business and competition is a foreign concept. If they need more money they tax for it. They get this tax money whether they provide good service or not. Wages are not fluctuating and being competitive never enters into it.

The other red herring is that public jobs pay less than private employers. I am sure that was true at one time, but that has been some decades ago. For example, a workforce job listing shows an administrative job at a state agency with a starting salary of $14 / hr. That same job at private industry is typically $10-12 an hour without all the top-drawer state benefits.

My sister-in-law works for a school district in New Jersey. She kept being told by her union that she was underpaid, being a public employee and all. She spent about 6 months looking for a private sector job. I remember her conversation with my wife very well about how she was offered many jobs, but all of them paid way less than she was getting. She told my wife "I don't understand that since I am a public employee and therefore getting paid less than market." My wife explained how the wages she was being offered in her search WERE the market. Subsequently my sister-in-law stayed with the school district.

I have a lot of respect for most public employees. I have a lot of contact with state and county employees in my job and I think most of them are great. I don't begrudge their wages, but I do begrudge a mentality of an entitlement to pay raises. And let go the red herring that state workers are paid less than their counterparts in the real world are.

Has anyone read teh bill? It is the most stupid piece of legislation I have read in 35 years of reading stupid legislation. It's one of those, if I have to tell you, there's nothing to debate, so I won't.

We have two models of how government should respond to an economic crisis.

1) Do nothing. Allow prices and wages to fall and the markets and distribution channels to clear out and liquidate the products of excess. (1920-1921)

2) Massive government counter-cyclical spending, massive public spending and bailouts (1930-1939), (2008-9)

Guess which one actually works...Oh wait, you've NEVER heard of the great depression of 1922?

LOL

cf Sweden. They got themselves out of just this pickle recently.

Old Ducker:

Guess which one actually works...Oh wait, you've NEVER heard of the great depression of 1922?

Bob T:

I've been reading about this post-WWI downturn that fortunately did not get out of hand. The lesson here is that the presidents at the time (Mrs. Wilson, Harding) and congressional leaders resisted the short-term emotions and cared not a wit that they'd be seen "doing nothing".

It's difficult to govern using sound, basic economics because those who are into short-term emotion-based politics (usually because they don't understand basic economics are don't care) easily whip up the voters with the usual rhetoric designed to get votes. That's why it's important to them to keep people uneducated about sound, basic economics (there might be as many as three Republicans in Washington who try).

Bob Tiernan Portland

An amazing excerpt from Harding's inauguration speech in which he praises doing nothing:

"The economic mechanism is intricate and its parts interdependent, and has suffered the shocks and jars incident to abnormal demands, credit inflations, and price upheavals. The normal balances have been impaired, the channels of distribution have been clogged, the relations of labor and management have been strained. We must seek the readjustment with care and courage. Our people must give and take. Prices must reflect the receding fever of war activities. Perhaps we never shall know the old levels of wages again, because war invariably readjusts compensations, and the necessaries of life will show their inseparable relationship, but we must strive for normalcy to reach stability. All the penalties will not be light, nor evenly distributed. There is no way of making them so. There is no instant step from disorder to order. We must face a condition of grim reality, charge off our losses and start afresh. It is the oldest lesson of civilization. I would like government to do all it can to mitigate; then, in understanding, in mutuality of interest, in concern for the common good, our tasks will be solved. No altered system will work a miracle. Any wild experiment will only add to the confusion. Our best assurance lies in efficient administration of our proven system.”

<h2>I like the bill except it must be joined with increased revenue from another source. It is not a job creation bill, and it is only made out as such to avoid the reality of having to tax business more to make up the difference. Unfortunately any real tax reform is fruitless in this economic climate. Let's try to do this on the next upswing(if there is one).</h2>