Monday, January 26, 2009

Krazy Krugman/Washington economics

We are hearing a lot about how the Obama Administration and congress is going to an "economic stimulus" program. Which sounds all well and good considering how screwed up the economy is thanks to the sub prime debacle. Of course there are some detractors saying it is too expensive and is not worth it. I have not been following the details too closely what little there are. But, New York Times columnist/economist Paul Krugman tries to explain the costs and why it's worth it. He may have won a Nobel Prize in Economics but I am not impressed. here are the money quotes:

"First, there’s the bogus talking point that the Obama plan will cost $275,000 per job created. Why is it bogus? Because it involves taking the cost of a plan that will extend over several years, creating millions of jobs each year, and dividing it by the jobs created in just one of those years."

Okay so far. Of course opponents will try an exaggerate the cost of the program. So liberal Krugman has a point here. But, he then goes on:

"The true cost per job of the Obama plan will probably be closer to $100,000 than $275,000 — and the net cost will be as little as $60,000 once you take into account the fact that a stronger economy means higher tax receipts."

The true cost is closer to $100,000 per job? Even at a cost of $60,000 it's still an outrageous cost per job! He can't be serious can he? How about the government give say $10.000 to U.S. citizens who have owned our homes for x number of years. We'll create jobs by putting on new roofs, windows etc.. on our houses. I need to mount some solar panels on my roof that are currently taking up space in my living room. I'll spend money buying some solar frames to do that. That would be a better way to stimulate the economy than to spend $100,000 to create a $50,000 dollar job. Only in Washington D.C. and in the mind of a liberal economist does spending this kind of money make sense.

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