If you compare spending as % of GDP under the first three years of Obama with the first three years of Reagan (or Bush, who also came in during a recession – the tech bubble pop) i.e., leaving out the anomalous year, you see a notable difference in the figures. Obama averaged around 24% of GDP, while Reagan was 22.5%. By comparison, Bush was around 19% in his first term and 20% in his second.

Paul Krugman estimated the actual “stimulating part” of the “stimulus” to be in the neighborhood of $500 billion and he was likely being generous with his estimates of how much of these tax gifts were actually spent instead of saved (or used to pay down debt). I’m not really sure what to call the non-stimulating part of the “stimulus,” “extortion payments” seems to be the best descriptor.

If the Republican Supreme Court decides to kill the ACA it may be that Obama’s most significant domestic accomplishment could be the elimination of the Bush tax cuts; if he musters the will to actually get it done.

The ARRA was a total of $787 billion, which included a $70 billion adjustment to the AMT, which was going to happen ANYWAY! See Wikipedia:

http://en.wikipedia.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009

So total stimulus was about $707 billion to fill a more than $2 Trillion hole over a two-year period.

The amount was spread over TWO YEARS, with authorized projects/programs required to be STARTED within that time.

To get Arlen Spector’s vote (which required votes from Olympia Snow and Susan Collins, for “cover”) the originally proposed amounts for unemployment and state “Revenue Sharing” were reduced and the tax cuts were increased. Here the government spending of tax cuts, with a “multiplier” of $0.45 per $1 of cut, were increased at the cost of provisions with higher multipliers such as unemployment insurance with an increase in GDP of $1.60 per $1 spent. Thus the ARRA was made less effective by Republicans. You are right in that Republicans made sure to increase the amount of the stimulus that went to people with low MPCs. Great!

A number of Robert Barro’s articles that I have seen have been totally discredited for having conveniently left out important details.

This was the liberal fiscal playbook in action, and we now see its economic results. The unemployment rate was supposed to be closer to 6% today, not 8.2%. The recovery in jobs, output and income is about half the strength of a normal recovery, according to Congress’s Joint Economic Committee.

Instead of a positive multiplier from the spending, the impact was close to zero. Harvard’s Robert Barro reports that in many cases the multiplier from government spending is less than 1.0, meaning that “greater spending tends to crowd out other components of GDP,” mostly private investment.” -unknown authors @ WSJ.com

When “stimulus spending” isn’t precisely defined, all spending becomes “stimulus spending” and multipliers become hard to distinguish from zero. We only add to the muddle by trying to make sure “liberal” oligarchs benefit as much as “conservative” oligarchs by calling any of these income tax breaks stimulative. Keynes tried to tell us its mostly about MPC. An added column in their table showing the dollar amount of tax “gifts” given to these various income groups would have quickly revealed how little of it goes to anyone with a high MPC. In fact, given that our tax rates are well below optimal levels, and that almost all with a high MPC pay no income taxes at all, there’s a strong case to made that eliminating all of the Bush tax cuts will have a negligible effect on spending. The amount of money we are diverting from government revenues to pay down debt of the fairly well-off and add to the wealth of the extremely wealthy with no public benefit whatsoever is obscene. That we do we this in spite of the fact that more than 20% of the Nation’s children now live in poverty is child abuse.

It appears that it is only historians now that are concerned with the legacy of the choices we made. This will be a sad chapter indeed for future students to have to learn about.

When they say “economic crisis”, they mean that they have to pay taxes which are being transferred to individuals whom they believe to be undeserving of assistance. Hence, cut taxes on the rich and cut non-defense spending.

The fact that they use vocabulary incorrectly isn’t a coincidence. It is how they’ve sold these policies for a generation plus now.

“In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate.”

Corporate profits mean nothing to the average person, unless one considers their paltry savings in pensions or 401ks, and much of those profit (dividend) gains are often erased by fees or poor investments by funds.

When you sell financial philosophy today, you are not selling reality, you are selling a dream. Someday, you might hit the lottery and have to pay a high income tax rate, or you will find gold in your backyard and will face a huge capital gains tax.

The fact that Romney was seen personally painting the fence on his new California property, shows what happens when the rich get their money. They don’t even spend it on a painter, because they are cheap.

Reminds me of a fellow in the 1960s, who fell off his ladder while painting his barn. His inherited, approximate stock portfolio then exceeded $100 million, but boy, was he cheap. I suppose that’s an example of fall down, rather than trickle down, economics.

Of course the only problem with this argument is profits themselves. They have gone from about $600 billion at the beginning of the Obama Presidency to $1.8 trillion today. So if profits are key Mr. Obama has done an outstanding job in producing them.

Of course, profits without aggregate demand increases only leads to the accumulation of cash balances by businesses, or stock re-purchases, which is exactly what is happening.

How exactly can people like Mr. Gramm and Mr. Hubbard with all their great credentials be so wrong?