September unemployment is 9.8 percent

In the end I think Obama will laregly be judged by where this number is in September/October of 2012. Everyone assumes it will come down quite a bit but there is nothing that says it has to. Look at Europe.

What is the purpose of an economic stimulus?

A. Pay off supporters.
B. Build confidence in consumer and corporate spending.
C. Increase the national debt.
D. Reduce unemployment.
E. All of the above.

Please choose best answer.

Agreed. Someone tell our elected officials.

I'm not convinced politics and economics don't go hand-in-hand to some extent. Of course certain folks take the relationship too far in order to advantage of our economically ignorant public.

You can't have capitalism without statism.

For someone who supposedly has an MBA, you have a really poor understanding of economics. The President of the US and the public policy he sets has very little impact on the unemployment rate.

Since you're a fan of analogies, Obama trying to stem the surge in unemployment is akin to building a dyke out of bricks to keep out a 90-foot tsunami.

The stimulus at most could swing unemployment by half a %, and that's IF it's fully successful. But to blame the 9.8% on Obama or the stimulus is ludicrous and reeks of failure to understand economics.

I'm not disagreeing with you here. I'm just curious though- Obama said the #1 goal of the stimulus is to create 3 million new jobs in two years. I don't have any figures in front of me as to how many adult Americans are unemployed currently, but I would think that if fully successful, 3 million new jobs would swing the rate by more than .5%.

Although I guess it doesn't really matter considering we're around 8 months into those 2 years and unemployment is still rising.

I'm not disagreeing with you here. I'm just curious though- Obama said the #1 goal of the stimulus is to create 3 million new jobs in two years. I don't have any figures in front of me as to how many adult Americans are unemployed currently, but I would think that if fully successful, 3 million new jobs would swing the rate by more than .5%.

Although I guess it doesn't really matter considering we're around 8 months into those 2 years and unemployment is still rising.

Well let's do some rough math. 300 million american citizens, assume 60 million or so are seniors, another 60 million or so are 18 or under, that leaves 180 million. Then some won't be in the workforce for a number of reasons. So figure there are 150 million in the workforce.

Create 3 million jobs, that represents 2% of the workforce.

But then a lot of those jobs Obama is creating are not permanent ones. So while they create a total of 3 million, it doesn't count the ones that go away once a project is finished (infrastructure projects).

So figure a 1-2% improvement in unemployment, based on this very rough math. So now reflecting on it, if fully successful, it's a little better than I first thought.

But still, unemployment is at 9.8%, and if stimulus got a 2% improvement, that's still 7.8% unemployed. Historically very high. There's just nothing any administration could ever do to keep us at the 4-5% we're used to.

But still, unemployment is at 9.8%, and if stimulus got a 2% improvement, that's still 7.8% unemployed. Historically very high. There's just nothing any administration could ever do to keep us at the 4-5% we're used to.

I can understand nothing can keep us at 4-5% consistently, but wouldn't lowering the corporate tax rate be fairly effective in reducing unemployment?

I can understand nothing can keep us at 4-5% consistently, but wouldn't lowering the corporate tax rate be fairly effective in reducing unemployment?

Yes. Though that would aslo cause the federal deficit to get worse.

1/3 of the stimulus is tax breaks for corporations and consumers. WJ has a really nice breakdown of where the money is going (http://online.wsj.com/public/resources/documents/STIMULUS_FINAL_0217.html).

Objective:
Avoid depression, get corporations hiring people and people spending money to stimulate the business cycle thus jump starting the economy.

The Keynesian:
In a time of deep recession reducing the corporate tax-rate alone won't necessarily give corporations incentive to hire more. You want corporations spending money in hiring people and the best way to guarantee they do is to give them government contracts.

The Monetarist:
Government should give corporations tax cuts and expand the money supply (print money and lend it on the cheap), and then get out of the way.

The Austrian:
Do nothing. The problem will self-correct.


* Economic theories are simplified.

Objective:
Avoid depression, get corporations hiring people and people spending money to stimulate the business cycle thus jump starting the economy.

The Keynesian:
In a time of deep recession reducing the corporate tax-rate alone won't necessarily give corporations incentive to hire more. You want corporations spending money in hiring people and the best way to guarantee they do is to give them government contracts.

The Monetarist:
Government should give corporations tax cuts and expand the money supply (print money and lend it on the cheap), and then get out of the way.

The Austrian:
Do nothing. The problem will self-correct.


* Economic theories are simplified.

** Economic theories are not mutually exclusive of one another.