Bang for Your Stimulus Buck

From Media Matters 1/29/09:
Mark Zandi, chief economist at Moodys.com, has also predicted that even if real GDP returned to its 2008 level by 2012, unemployment would still remain over 9 percent if fiscal stimulus is not implemented. If a stimulus plan of at least $750 billion is passed, Zandi predicts that GDP will reach its 2008 level in 2010 and that unemployment will fall back to "close to 5% by late 2012."

From Zandi's January 6 report:

"The $750 billion stimulus plan would not forestall a sizable decline in real GDP in 2009, but it would ensure that real GDP returns to its previous peak by the second half of 2010 (see Table 3).

The fiscal stimulus limits the peak-to-trough decline in jobs to some 5 million, and the unemployment rate peaks at nearly 9% in early 2010.

With the stimulus, the unemployment rate falls back to its full employment rate of close to 5% by late 2012.

Without the stimulus, the unemployment rate rises to well over 11% by mid-2010 and ends 2012 at over 8%, still extraordinarily high."

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One year $ change in real GDP for a given $ reduction in federal tax revenue or increase in spending

Tax Cuts
Non-refundable Lump-Sum Tax Rebate 1.02
Refundable Lump-Sum Tax Rebate 1.26

Temporary Tax Cuts
Payroll Tax Holiday 1.29
Across the Board Tax Cut 1.03
Accelerated Depreciation 0.27

Permanent Tax Cuts
Extend Alternative Minimum Tax Patch 0.48
Make Bush Income Tax Cuts Permanent 0.29
Make Dividend and Capital Gains Tax Cuts Permanent 0.37
Cut in Corporate Tax Rate 0.30

Spending Increases
Extending Unemployment Insurance 1.64
Temporary Increase in Food Stamps 1.73
General Aid to State Governments 1.36
Increased Infrastructure Spending 1.59

source: Mark Zandi, chief economist at Moodys.com

Obama Wasting No Time - Tougher Auto Emissions and Fuel Standards

Source: NY Times

Change is in the air...

The Obama Administration is quickly taking action to improve auto mileage standards and tighten tailpipe emissions standards. These actions will break through decades of stall tactics, aided and abetted, by past Administrations and the auto industry. Nothing like some real economic and environmental heat and pressure, to focus citizens on the need to change things, if we want to realize different outcomes. Cleaner air and lower fuel costs require a systemic process change. That change starts right now.

WASHINGTON - 1/25/09 — President Obama will direct federal regulators on Monday to move swiftly on an application by California and 13 other states to set strict automobile emission and fuel efficiency standards, two administration officials said Sunday.

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Beyond acting on the California emissions law, officials said, Mr. Obama will direct the Transportation Department to quickly finalize interim nationwide regulations requiring the automobile industry to increase fuel efficiency standards to comply with a 2007 law, rules that the Bush administration decided at the last minute not to issue.

To avoid losing another year, Mr. Obama will order temporary regulations to be completed by March so automakers have enough time to retool for vehicles sold in 2011. Final standards for later years will be determined by a separate process that under Mr. Obama’s order must take into consideration legal, scientific and technological factors.