By Jeff Poor
Business & Media Institute
6/25/2010 3:33:56 PM
Santelli, Kudlow: Obama-Style Bailout/Keynesian Economics Not Working
And on CNBC’s June 25 broadcast of “The Call,” CME Group floor reporter Rick Santelli explained that all government spending is not created equal, and President Obama’s so-called stimulus spending was for government payrolls and not the infrastructure improvement is was sold to be.
“The IMF has done a study that for every dollar of government spending, you only get 70 cents more in GDP, and after year two it goes to zero,” Kudlow said. “Now, I think we're going to zero. No wonder our borrowing ratios are so high.
When are we going to learn that this kind of stimulus isn't even what Keynes argued for many years ago?”
DeKaser, one of the segment’s panelists, argued that 70 cents of GDP growth was better than nothing, which Kudlow questioned.
“You borrow a dollar to get 70 cents, and you lose 30 cents?” Kudlow said. “Boy, that sounds like a bad deal, my friend. I wouldn't want you trading my account. I mean, the whole thing could go deeper into debt.”
...
“Rick, why is it artificial to keep teachers in the classroom and cops on the beat and firemen in the firehouses?”
[Steve] Liesman said. “To me that's not artificial stimulus. That's just good policy.
[Rick Santelli] -
“Because that's what people pay property taxes for, and if the state of California when the bubble was going on raised boatloads of property taxes, why should the value of somebody's house make collecting garbage more expensive, running transportation more expensive? It doesn't. They spent all the money. So, why does my share have to pay for their teachers?”
