Excellent post from Mankiw’s blog found here. We will touch on many of these topics during this class.
A few quick thoughts:
Are numbers 4 and 11 in direct conflict with each other (maybe if we assume the government will never aim for a surplus)? This leads to the question of the probability of number 8 occurring.
For number 10, think food stamps.
Why specify “young and unskilled workers” in number 12?
Number 7 looks like a classic prisoner’s dilemma.
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#4-The stimulus package will lead to more national debt, so it is in conflict with #11. But #11, about national debt having an adverse effect, has already happened. We are in massive debt already. A stimulus package is necessary to prevent the economy from getting ridiculously worse. It isnt going to solve all the problems, but doing nothing will surely cause way more. We are already going to suffer the consequences of the country's debt for years and years; what's the big difference in adding more, if it is going to benefit the economy and help create and save some jobs? The unemployment rate will rise even MORE without the stimulus.
ReplyDelete#12-A minimum wage increases unemployment among young and unskilled workers. (79%)
ReplyDeleteWhy specify "young and unskilled"?
These are the groups who are most affected by the imposition of a minimum wage.
This is exactly the stance that Mackenzie argues in Taking Sides, that, “with teen unemployment in double digits—running as high as 40.9%—it is obvious that some labor markets are not clearing. If labor market imperfections led to such levels of unemployment, economists like DeLong, Card, and Kruger would call for government intervention to correct these “market failures.” Yet they find double digit teen unemployment acceptable when it derives from government intervention” (Bonello 221).