Sunday, August 07, 2011


Who says our leaders are divided?  They all get behind "jobs."  In fact, commentators routinely and helpfully suggest that the President (or anyone else in politics) should "focus on jobs".  With the downgrade of U.S. credit, this is now the universal mantra.

But there are, as we know, serious differences re how to get there.  I found this post by Jerry O'Driscoll useful:

" ... stimulus has not two but three stages. It may boost growth when added, but must slow growth when withdrawn. The third stage comes when taxes (current or future) must be paid to fund the stimulus. That stage is always negative in its effects."

The various political sides consider and weight the stages of stimulus (as well as their magnitudes) very differently.  While they all "focus on jobs", they disagree on policy and, more specifically on how many stages of stimulus there are and how they each matter.

I would like to add a fourth stage.  Pay for negative-NPV projects (high-speed rail, "green jobs" and the like) with stimulus and the productivity of the economy declines.  Is that any way to "focus on jobs"?