SHOCK: Increase in government spending causes unemployment

  • Thread starter Thread starter ballz2wallz
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not really, it is something that incumbents use...they bring home the bacon. It is very interesting to try to quantify it. I have been reading it since yesterday, very
 
what, you mean big corporations that are the ones giving politicians money are the ones who get the kickbacks while the small businesses end up suffering for it?

Nooooo!
 
While I might be for government spending and programs.

I would happily support Congressional term limits to limit career politicians....which I assume is the point of the paper? As politicians continue to get entrenched in Washington, they stop caring about their state/district?
 
No. What it says is that as politicians continue to get more power and more money spent in their districts, the businesses in their districts retrench.
 
Do they take into account what type of earmarks they are sending back?

That would make a difference if they are earmarking government projects or private sector initiatives.
 
I don't think it matters. The trend was the same for all politicians and spending.
 
Did you mean: Crowding out (economics)
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In economics, crowding out is any reduction in private consumption or investment that occurs because of an increase in government spending. If the increase in government spending is financed by a tax increase, the tax increase would tend to reduce private consumption. If instead the increase in government spending is not accompanied by a tax increase, government borrowing to finance the increased government spending would increase interest rates, leading to a reduction in private investment. There is some controversy in modern macroeconomics on the subject, as different schools of economic thought differ on how households and financial markets would react to more government borrowing.

Usually when economists use the term "crowding out" they are referring to the government spending using up financial and other resources that would otherwise be used by private enterprise. However, some commentators use "crowding out" to refer to government providing a service or good that would otherwise be a business opportunity for private industry.
 
HOLY FUCK!





That's, like, a really... really... really tiny effect.

It's almost like someone worked really hard to get something published because they like getting grant money and tenure.
 
Before you ask, the observed employment effect for the top chair position is -0.009, and not significant at a 90% confidence level.

Which is to say: there is no effect.
 
It would matter depending on what types of earmarks they sent back.

$300 million for a new government wildlife park

vs

$300 million in tax subsidies for a technology company
 
Average firm loses out, but I'm willing to bet that some companies (those with lobbying power, connections) make a killing when this happens.
 
But we're not talking about exceptions, we're talking about overall...which means average.
 
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