No to Throwing Money Away

Kudlow:

Meanwhile, a new CBO report has pulled the rug out from under the Obama stimulus package. Of $355 billion in infrastructure and other cash outlays, only $136 billion would be spent by October 2010. And out of the roughly $100 billion in infrastructure spending, only $26 billion would be spent in fiscal 2009. So much for a quick and immediate jolt to the economy. Oh, by the way, even if the entire stimulus package were put into play, various people have calculated that the estimated 3.5 million new jobs would cost $225,000 per job.

In today’s Wall Street Journal, distinguished Harvard economist Robert Barro estimated that the so-called government-spending multiplier for GDP associated with peacetime government purchases would be “insignificantly different from zero.” While left-wing economist Paul Krugman rants on about opponents to Keynesian stimulus — calling them quacks — a growing list of prominent academic economists oppose the Keynesian approach. In yesterday’s Journal, economists Alberto Alesina of Harvard and Luigi Zingales of the University of Chicago rejected the Keynesian spending approach while suggesting that a capital-gains tax holiday would bring private investors back into the market.

Stanford economist John Taylor also opposes the stimulus package. So does University of Chicago’s Eugene Fama. So does University of Chicago Nobelist Gary Becker. So does New York University professor Thomas Sargent. And Harvard economist Greg Mankiw, who similarly opposes the Keynesian stimulus, has used his highly popular blogsite as a clearinghouse of opposition.