tag:blogger.com,1999:blog-23061971.post5114973691559169773..comments2024-03-15T03:16:46.386-04:00Comments on Objectivist v. Constructivist v. Theist: Bailout #2: The Stimulus Package and IncentivesThe Constructivisthttp://www.blogger.com/profile/07242149985581771922noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-23061971.post-4000226345716785802009-02-04T10:28:00.000-05:002009-02-04T10:28:00.000-05:00Why would anyone think that the states spend too l...Why would anyone think that the states spend too little or that we subsidize education with too few dollars? <BR/><BR/>In the absence of such an argument, it is hard to see why anyone would think this is a good way to jump start the economy.The Objectivisthttps://www.blogger.com/profile/00416501145750028695noreply@blogger.comtag:blogger.com,1999:blog-23061971.post-30143514440743492392009-02-04T10:27:00.000-05:002009-02-04T10:27:00.000-05:00The Theoretical IssueEven the notion that the cred...The Theoretical Issue<BR/><BR/>Even the notion that the credit market has done better and therefore the bank bailouts were a success has several flaws. <BR/><BR/>First, the benefits are likely outweighed by the costs. Remember that a $700 bailout bill, probably $900B by the time interest is added in, is a huge drag on future income and will provide clear incentives for future government expansion that will also be a huge drag. To ignore this is not to engage in a cost-benefit analysis. <BR/><BR/>Also, the market would have eventually forced the banks to give up their huge reserves and lend out the money. Failure to do so causes lost profit-opportunities and it is hard to find a case where such behavior has been a long-term feature of the economy.The Objectivisthttps://www.blogger.com/profile/00416501145750028695noreply@blogger.comtag:blogger.com,1999:blog-23061971.post-91241658322250058192009-02-04T10:24:00.000-05:002009-02-04T10:24:00.000-05:00The Practical IssueIn the previous section, Brian ...The Practical Issue<BR/><BR/>In the previous section, Brian argued that we should distinguish the following issues. <BR/>1) Should there be bailouts?<BR/>2) How should the bailouts be spent?<BR/><BR/>This is a mistake. A bailout package is a particular bill. Whether we should support bailouts depends on the quality of the bills that are likely to be signed by Congress and Obama. If these all make the economy worse, then they should not be signed.The Objectivisthttps://www.blogger.com/profile/00416501145750028695noreply@blogger.com