Originally Posted by Parallax
Last time she was here, she said US federal government spent a trillion dollars and did not have anything to show for it. In a post
I explained how her claim was simply wrong. Now she is saying that US spent more than a trillion dollars
and did not get anything. Which is a bigger lie than the original one. I don't what to say, either she thinks we (her audience) are so dumb she can get away with it or working in reason magazine (the irony) has made her immune to reality.
I hope Bob & co.
make sure Ms. Mangu-Ward issues a correction.
Poking holes in her argument aside, the goal of expansionary fiscal policy is not to create jobs directly as such. The goal is to shift the total debt burden from households to the federal government. When households have repaired their balance sheets the aggregate demand will return to a normal level and we will see falling unemployment, for example cutting payroll tax by 2% does not create jobs directly but it helps people to pay down their mortgages and student loans and credit card debts slightly faster. Moreover given that housing bubble specially really hurt the average American household's balance sheet and that the federal government can borrow money at negative real rates such a shift is a no brainer.
So $10 dollars more in your paycheck every week ($500 per taxpayer) was supposed to repair balance sheets and pay down mortages and student loans and credit cards?