Read Catastrophe for Free Online

the government spends has to come from somewhere, which means from the private economy in higher taxes or borrowing. The public works are usually less productive than the foregone private investment.” 39
    But don’t take our word for it. A wide range of economic experts is already on the record as disagreeing with Obama and predicting failure for his stimulus package.
    ----
    TOP ECONOMISTS SAY NO TO OBAMA’S STIMULUS PROGRAM
    GARY BECKER, WINNER OF THE NOBEL PRIZE IN ECONOMICS:
    “I tend to believe that [estimates of stimulus from government spending] are excessive. They will be put together hastily, and are likely to contain a lot of political pork and other inefficiencies. For another thing…it is impossible to target effective spending programs that primarily utilize unemployed workers, or underemployed capital. Spending on infrastructure, and especially on health, energy, and education, will mainly attract employed persons from other activities to the activities stimulated by the government spending. The net job creation from these and related spending is likely to be rather small. In addition, if the private activities crowded out are more valuable than the activities hastily stimulated by this plan, the value of the increase in employment and GDP could be very small, even negative.” 40
    ERNIE GROSS, PROFESSOR OF ECONOMICS, CREIGHTON UNIVERSITY:
    “We’re creating a real problem for 2010 and beyond in terms of inflation, tax rates, and certainly in terms of debt.” 41
    GEORGE REISMAN, AUTHOR OF CAPITALISM: A TREATISE ON ECONOMICS:
    “That [increasing government spending to stimulate growth] is a view held by a large school of economists, perhaps the majority school, for the last 60 years or so. That’s the Keynesian school, but there are other economists, likethe Austrian school, which holds a very different position…. In their view, an essential requirement to a sound economy is balanced budgets with small government.” 42
    ROBERT BARRO, PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY:
    “This is probably the worst bill that has been put forward since the 1930s. I don’t know what to say. I mean it’s wasting a tremendous amount of money. It has some simplistic theory that I don’t think will work, so I don’t think the expenditure stuff is going to have the intended effect. I don’t think it will expand the economy. And the tax cutting isn’t really geared toward incentives. It’s not really geared to lowering tax rates; it’s more along the lines of throwing money at people.” 43
    ARNOLD KLING, MERCATUS CENTER FINANCIAL MARKETS WORKING GROUP:
    “[T]he risks of a large stimulus, compared with a small stimulus, are:
It is harder to spend larger amounts quickly and cost-effectively.
There is a greater risk that we will run into a “sudden stop,” in which foreign investors are no longer willing to fund our deficits.
There is a risk that fiscal stimulus, large or small, is actually ineffective, so that a large stimulus only means a large failure.
There is a risk that much of the spending will kick in after a recovery is underway.
The government’s capacity to deal with an emergency, such as a major natural disaster or a foreign attack, will be limited, because its credit worthiness will be damaged.
There is a risk that government will absorb a permanently higher share of GDP. Policymakers will be reluctant to cut public spending for fear of causing a downturn. Moreover, it will be difficult politically to cut public spending.” 44
    THOMAS SARGENT, PROFESSOR OF ECONOMICS, NEW YORK UNIVERSITY:
    “The calculations that I have seen supporting the stimulus package are back-of-the-envelope ones that ignore what we have learned in the last sixty years of macroeconomic research.” 45
    GREG MANKIW, PROFESSOR OF ECONOMICS, HARVARD UNIVERSITY:
    “My advice to Team Obama: Do not be intellectually bound by the textbook Keynesian model. Be prepared to recognize that the world is vastly more complicated than