The cost of the stimulus package
What are the costs for the stimulus bill past the first two years? Congressional Budget Office estimates the impact of permanently extending the 20 most popular provisions of the stimulus bill. The costs are truly staggering. The true 10 year cost of the stimulus bill $2.527 trillion in in spending. Heritage is wrong to include the interest costs in its discussion (it is really double counting).
Labels: stimulus
posted by John Lott at 12:46 AM
6 Comments:
assuming a population of 306M people (c.f. Wikipedia), that is 8258$ per capita.
Let's do a very rough computation: assuming a prime rate of 3% (non-compound), that's 2477$ in taxes to repay, just for the interest on the capital, to the Federal Reserve, per capita, over a period of 10 years
I assume the capital will not have to be reimbursed.
On top of that, we must add another loss:
The M3 money supply is at 10T$. That's (from my limited understanding), the amount of outstanding $, a book entry, on which interest is due.
So, the newly created 2.527T out of thin air will inflate M3 from 10T to 12.527T%, therefore reducing the purchasing power of every buck you ever saved to 80 cents in the old dollar. Maybe it does not work that way. The freely circulating cash,
Who will get hit worst? the most responsible people in society, those who saved prudently instead of loading themselves with credit. Who will get rewarded? those who stretched their credit, got irresponsible.
Well Professor Lott I think you are missing a trillion dollars from your posting...
From the Heritage blog site: True Cost of Stimulus: $3.27 Trillion
Consider perusing Rep. Paul Ryan's own blog posting: True Cost of the So-Called “Stimulus” Bill
Dear "1":
Thank you, but I explicitly noted in my post that it was wrong to include the interest costs in these numbers. That is the difference in numbers posted.
Hello Dr. Lott:
"I explicitly noted in my post that it was wrong to include the interest costs in these numbers"...
Now this is what I didn't understand and I don't see what you call, "double counting" since its still hanging out there for all of us and our decendents to pay off...
It reminds me of those who disassociate the cost of a house from the interest payments that are needed to pay the house off...
It makes no sense to me...
Here is the true cost of the "stimulus" package. I got this from a website that explains How Much is a Trillion?
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"Since most of the numbers between one and one trillion are even larger than those on the way to one billion, the average time required to pronounce them is even longer. Try, for instance, 369,472,888,227 (three hundred sixty-nine billion, four hundred seventy-two million, eight hundred eighty-eight thousand, two hundred twenty-seven). How long did that take you? I would say that six seconds is an average time per number in counting to a trillion. (Remember, you have to pronounce every syllable!)
That means it would take six trillion seconds or 190,259 years to reach the number one trillion - assuming of course, that modern science discovers the secret of immortality long before you achieve your goal. (6,000,000,000,000 seconds divided by 60 seconds per minute divided by 60 minutes per hour divided by 24 hours per day divided by 365 days per year = 190,259 years)."
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You might say it's a little less since smaller numbers (under 10,000) can be said in 1 or 2 seconds. Either way, 1 trillion is way too much for any government to be spending and putting future generations in debt for that amount.
I completely agree with the above post. While it is certainly illustrative to read macrostats and "think about what you want to think about" the reality is, that there is not one person in this world who can fathom a billion dollars let alone one trillion. I'm not sure that even a million is truly comprehensible. But enough of that - lets spend something big and hope people like it!
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