The Congressional Budget Office recently estimated that the so-called stimulus generated jobs and growth. I addressed some of the profound shortcomings in CBO’s Keynesian model in a previous post, pointing out that the model is structured to produce certain results regardless of what happens in the real world. Interestingly, the Director of the CBO, Doug Elmendorf, basically agrees with me. In a recent speech, recorded by C-Span, he was asked during the question-and-answer session whether the model simply spits out pre-determined numbers. After some hemming and hawing and a follow-up question, he confessed “that’s right” when asked if the model would be unable to detect whether the stimulus failed. The relevant exchange begins around the he 39-minute mark of this recording, and Elmendorf’s confession takes place shortly after the 40-minute mark (I selflessly watched the entire thing so you wouldn’t have to suffer waiting for the key moment).
I’m not sure whether this admission is good news or bad news. It is a sign of progress, I suppose, that CBO’s Director is now on the record acknowledging that the model is useless (at least for purposes of measuring the effectiveness of more government spending). But it is perhaps an even more troubling indication of what’s wrong in Washington that nobody is concluding that the time has come to junk Keynesian analysis. This is either an updated version of The Emperor’s New Clothes or a perverse form of the joke about the drunk looking for his keys under the streetlight because there’s light, even though he lost them someplace else.
[...] quickly jumped to 10 percent and remains stubbornly high. We’ve already beaten this dead horse (here, here, here, here, and here), in part because the White House has embarrassed itself even further [...]
[...] quickly jumped to 10 percent and remains stubbornly high. We’ve already beaten this dead horse (here, here, here, here, and here), in part because the White House has embarrassed itself even further [...]
[...] of bigger government. It was CBO that claimed that Obama’s stimulus created jobs, even though the head of CBO was forced to admit that the jobs-created number was the result of a Keynesian model that was rigged to show exactly that result . You would think that would shame the bureaucrats [...]
[...] These same models have failed to accurately predict the observed data. CBO’s Director confessed that they use Keynesian models to core the stimulus which guarantee the result merely based on [...]
[...] Maybe the big spenders in Portugal should import some of the statist bureaucrats at Congressional Budget Office. The CBO folks could then regurgitate the moving-goalposts argument that they’ve used in the United States and claim that the economy would be even weaker if the government hadn’t wasted more money. [...]
[...] Maybe the big spenders in Portugal should import some of the statist bureaucrats at Congressional Budget Office. The CBO folks could then regurgitate the moving-goalposts argument that they’ve used in the United States and claim that the economy would be even weaker if the government hadn’t wasted more money. [...]
[...] Maybe the big spenders in Portugal should import some of the statist bureaucrats at Congressional Budget Office. The CBO folks could then regurgitate the moving-goalposts argument that they’ve used in the United States and claim that the economy would be even weaker if the government hadn’t wasted more money. [...]
[...] But that analysis shouldn’t be a surprise. The CBO has a track record of partisan and ideological work. [...]
[…] that bigger government will “stimulate’ growth and create jobs. Heck, sometimes you even admit that you don’t look at real world […]
[…] predictions that bigger government will “stimulate’ growth and create jobs. Heck, sometimes you even admit that you don’t look at real world […]
[…] predictions that bigger government will “stimulate’ growth and create jobs. Heck, sometimes you even admit that you don’t look at real world […]
[…] predictions that bigger government will “stimulate’ growth and create jobs. Heck, sometimes you even admit that you don’t look at real world numbers. Which perhaps explains why Keynesian economics has a […]
[…] that bigger government will ‘stimulate’ growth and create jobs. Heck, sometimes you even admit that you don’t look at real world numbers. Which perhaps explains why Keynesian economics has a […]
[…] rates. And the bureaucrats at CBO also are reflexive advocates of Keynesian economics, which is why they claimed that Obama’s so-called stimulus was creating jobs even though unemployment was […]
[…] rates. And the bureaucrats at CBO also are reflexive advocates of Keynesian economics, which is why they claimed that Obama’s so-called stimulus was creating jobs even though unemployment was […]
[…] “stimulate’ growth and create jobs. The Keynesians are so confident in their approach that they’ll sometimes even admit that they don’t look at real world numbers. And that’s what the White House did in its […]
[…] growth and create jobs. The Keynesians are so confident in their approach that they’ll sometimes even admit that they don’t look at real world numbers. And that’s what the White House did in its […]
[…] “stimulate’ growth and create jobs. The Keynesians are so confident in their approach that they’ll sometimes even admit that they don’t look at real world numbers. And that’s what the White House did in its […]