I present a modest proposal to all those who “know” what all the economic results of the proposed stimulus bill would be.
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Your use of ‘modest proposal’ suggests satire, but this seems like a pretty good idea to me. That said, I think people who don’t immediately follow-up on your proposal probably aren’t so much motivated by fear as they are motivated by the fact that doing it properly would take some work and that it would require predictions from people on both sides to actually be meaningful.
Of course the predictions will be highly inaccurate, but the real question is whether one set of models is better than another. If there’s no competition, than the outcome would just be used as a cudgel against those who participate.
So, why not work to actually set this thing up and talk to a few prominent economists on each side to get it done? Don’t have to go with the top tier of people, but this seems like a project some of the blogging economists would be interested in under the right conditions.
I like the idea but the problem is that you will only be able to judge the variation in models based on the actual stimulus package that passes. That would be useful at least for the next go round, since we’d at least know whose model works better. But from a political standpoint, Jim DeMint will still be able to say, “If they’d only passed my tax cuts, things would have been far better.” And Paul Krugman will still be able to say, “If they’d only spent $2 trillion instead of $800 million, things would have been far better.” But then your point is, undoubtedly, there are no good models.
Thanks for the compliment. I might ask around at a couple of think tanks about it.
I agree, there are real limits to this. Some questions it wouldn’t answer (the first two, as per the post, the third yours):
1. Why was this model wrong?
2. Will this model be correct for some future prediction?
3. Would this model have been correct for some other action?
But i do think it would provide some useful information, and certainly more than we have now. The most important effect might be prophylactic – people might a whole lot less loud-mouthed about what idiots people are who disagree with them if they knew there was going to be a public reckoning about how right or wrong each guy was.
Jim….can it be that you don’t get what is happening?
The stimulus bill is the first nail in the coffin of conservatism.
If you are on the tit of the Holy Welfare State, why on earth would you need the Holy Ghost?
Republicans should oppose this with everything they have got, not because it is a bad bill, but because the welfare state will infect the country with Secularization Disease.
If you had played this game earlier in the Bush Administration, and we were judging the performance of all the players given the state of the economy now, which players would be doing better right now?
It seems like your idea is predicated on the concept that in a given economic model the outcome will be in some sense linear — so, Krugman says, look, if you have a $600 bil stimulus, 50% tax cuts, you get 10 milion plus or minus 10% jobs, if you have a $1200 bil stimulus, 25% tax cuts, you get 40 million pus or minus 10% jobs, and you can look after and say, damn, was he anywhere near right? and I just don’t get the feeling it works like that — and not simply because of the proliferation of complicated factors.
Near as I understand what you actually want to talk about is sort of probabilities of ending up in various situations which are at least short-term stable equilibria: something like (1) bang-on 5% annual GDP growth and 5% unemployment, (2) sluggish GDP growth, low inflation, sluggish job growth, (3) stagflation, terrible growth, (4) deflation, people jumping off of buildings, etc. with a hell of a lot more possibilities and variables. And ideally what I’d like to see prediction wise is stuff like, say, “well, if you pass a $900 bil stimlulus of mostly infrastructure spending and ‘green’ R&D, 10% max tax cuts, you’ve got a 50% chance of ending up in (1) and a 35% of (2) and a 15% of (3).” Realistically as I understand it that’s what you can do.
And there’s a problem for your idea because I think that those outcomes are, well, going to be pretty different form each other — a miss is as good as a mile. So you can’t judge a model by getting it close — you can only trash it if a particular equilibrium it ruled out (or damn near) comes to pass.
Incidentally this kind of idea is why I’ve found myself coming down hoping for a very minimal stimulus — unemployment help, backstopping some state spending, maybe measures to help employment (payroll tax cut?) and little else. Because it seems to me that one of those equilibria is one in which people lose faith in the ability of the US to pay its debts — and then our ability to maintain a social safety net is going to get hurt, bad, as will everything else. And it seems naively tome that the more you spend the more likely that is to happen — and even if it’s not real, real likely I’d think we’ve learned something about black swans (or in this case rapid flesh-eating zombie swans). Certainly as far as I can tell everyone, right and left, was a little stunned by the incredibly low rates on short-term Treasury debt — in how much faith people seem to have in US debt — so I worry a hell of a lot that everyone’s model underestimates how rapidly that faith can be lost, and that outcome is beyond awful.