Friday, September 25, 2009

Thee Sunbeam method of Government Stimulus

The evidence on Cash for Clunkers is that it just borrowed from future demand rather than creating new demand. After a quick spike of sales, future demand will be lower.

The first time homebuyer credit is seeing the same effect - 5/6 of the people claiming the credit were going to buy there house anyways, either today or in the near future. So the effective cost per incremental new house sale was $43,000. What a waste.

These programs made 2009 go slightly better than it would have otherwise, but will make 2010-2012 slightly worse. What a stupid way to run a business, or a country.

You know who else did this? Sunbeam.

Is Obama going to be the next Chainsaw Al?

No comments:

Friday, September 25, 2009