Over at Reason, the always way-smarter-than-me Veronique de Rugy has three myths & facts about stimulus spending. There’s a nice collection of scary-ass charts and myth-busting facts and all, but it boils down to just the subheads:
Myth 1: Stimulus spending can jump start the economy and fix unemployment.
Fact 1: Recent experience suggests stimulus spending won’t help.
Myth 2: Additional infrastructure spending is an effective way to stimulate the economy and create jobs.
Fact 2: In theory, infrastructure spending injects more money into the economy than other types of government spending. In reality, however, politicians rarely include infrastructure spending in stimulus bills. Instead, they spend money on items like transfers and tax cuts. Only 3 percent of the last stimulus went to infrastructure.
Myth 3: Tax rebates will stimulate the economy.
Fact 3: The evidence says they don’t. First, people usually save the extra money. Second, even if tax rebates did increase consumption, companies don’t hire employees or build new plants because of a one-time boost.
I only wish she’d included one more:
Myth 4: With the stimulus, unemployment wouldn’t rise above 8%.
Fact 4: Since the stimulus, the unemployment rate has shot up to 9.2%, and has been 9% or higher for 11 of the last 13 months.
There. Now we have a complete collection.