Evaluating Government Spending vs Tax Cuts impact on GDP - Center for American Progress

[JohnWxy]

This article provides a good review of several studies of how much impact the various provisions of the ARRA had on the economy.
The ARRA was consisted of four types of action:

■Tax cuts
■Transportation and infrastructure investment
■Social protection programs such as unemployment insurance, Medicaid, and nutritional assistance
■Financial aid to state and local governments

Tax cuts offered the least 'bang for the buck' of the four types of actions taken.

This article is a good source to refer to when commenting on articles on various media sites (for those who do this).


http://www.americanprogress.org/issues/2011/09/recovery_act_spending.html

Targeted government programs can spur jobs growth. Look no further than the American Recovery and Reinvestment Act of 2009, which contained a wide range of policies that resulted in between 1.4 million and 4 million jobs created or maintained by the summer of 2011, according to the nonpartisan Congressional Budget Office.<1> Not surprisingly, though, these policies varied in their impact and efficiency.

With policies as diverse as cutting taxes for middle-class families, providing unemployment insurance to those in need, helping state governments maintain critical education and other public services, and investing in upgrading transportation and other infrastructure, among other things, it’s not surprising that analyzing whether the Recovery Act “worked” requires more than a yes-or-no answer. The CBO analysis, as well as those from various academic and private-sector economists, proves the act worked overall, but not all parts worked equally well. With more still to be done for the U.S. economy and job creation, it’s important to look at what worked and what didn’t.

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A number of economic studies measure the impact of various components of the Recovery Act on economic growth and job creation. In this issue brief we review and compare the evidence from these studies on:
■Tax cuts
■Transportation and infrastructure investment
■Social protection programs such as unemployment insurance, Medicaid, and nutritional assistance
■Financial aid to state and local governments

The studies we reviewed estimate each policy’s “bang for the buck,” or how much $1 of program spending increases overall activity in the economy.