Mankiw And Meltzer Are Right! More Or Less

by Mario Rizzo  

As we have been saying here, the claims that the fiscal stimulus has saved or created X number of jobs is not a simple empirical question. It must be an inference from a model that tells us what would have happened in the absence of that stimulus. Collecting reports from various firms or local governments about their job situations will not do. At best these individual reports are based on pop-theories on the part of the reporters about what would have happened. Continue reading

Keynes Supported Counter-Cyclical Payroll Tax Reductions

by Mario Rizzo

 

It seems that a number of conservative or libertarian economists are now supporting a temporary reduction in payroll taxes as a preferred stimulus idea. See, for example, here  

 

John Maynard Keynes beat them to it! In correspondence with the economist James Meade in 1942 Keynes says he is “converted” to Meade’s idea of altering the social security payroll tax over the business cycle. Continue reading