On Wed, 2009-01-07 at 19:52 +0100, Laurent GUERBY wrote: > On Tue, 2009-01-06 at 10:15 -0500, Louis Proyect wrote: > > http://krugman.blogs.nytimes.com/2009/01/06/stimulus-arithmetic-wonkish-but-important/ > > January 6, 2009, 9:26 am > > Stimulus arithmetic (wonkish but important) > > [...] > > In the extended entry, a look at my calculations. > > > > The starting point for this discussion is Okun’s Law, the relationship > > between changes in real GDP and changes in the unemployment rate. > > Estimates of the Okun’s Law coefficient range from 2 to 3. I’ll use 2, > > which is an optimistic estimate for current purposes: it says that you > > have to raise real GDP by 2 percent from what it would otherwise have > > been to reduce the unemployment rate 1 percentage point from what it > > would otherwise have been. Since GDP is roughly $15 trillion, this means > > that you have to raise GDP by $300 billion per year to reduce > > unemployment by 1 percentage point. > > > > Now, what we’re hearing about the Obama plan is that it calls for $775 > > billion over two years, with $300 billion in tax cuts and the rest in > > spending. Call that $150 billion per year in tax cuts, $240 billion each > > year in spending. > > [...] > > According to: > http://www.bls.gov/news.release/empsit.t01.htm > There are 10.3 millions so-called "unemployed" (and 80.2 millions "not > working") people in the USA, for an "unemployment rate" of 6.7% > (of a 154 millions "active" population). > > According to: > http://www.bls.gov/news.release/wkyeng.t01.htm > The median yearly wage is $37500 per year. > > 775 billions for two years is 387 billions per year. 387 billions per > year is the median yearly wage for ... 10.3 millions people. > > So you can wipe out "unemployment" as currently measured to exactly zero > for two years by having the government hiring people to dig lots of > holes and then fill them up or whatever you find more useful (surely > there's some infrastructure to work upon). > > How can that become only a bit more than 1% of "unemployment" decrease? > > Is basic arithmetic failing me?
http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=01&year=2009&base_name=basic_stimulus_arithmetic Dean Baker concludes on a cost of "about $65k per job year". Laurent _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
