There was an error in this gadget

Follow Paul Gregory by Email

Sunday, April 8, 2012

The Tea Party Already Saved Taxpayers $300 Billion (Maybe a Half Trillion)


A “counterfactual” is an analysis of “what would have happened if.” President Obama’s claim that “the stimulus added as many as 3.3 million jobs” is the most famous example of this genre. 

Counterfactual analysis of the effects of the 2010 election on federal spending can be executed, unlike the jobs-saved analysis, on a more solid foundation with nothing more than a pocket calculator. The procedure is simple: First, we find what the Obama administration intended to spend in 2011 and 2012 on the eve of the November 2010 election (and not knowing that an electoral disaster lay in store). Second, we compare these figures with what was actually spent in 2011 and what is likely to be spent in 2012.  For example, if the administration planned to spend $3 trillion in 2011 but actually spent $2.5 trillion after the Republicans gained the House, the “counterfactual saving” for 2011 is $.5 trillion.

According to my arithmetic, the unanticipated Republican November 2010 sweep of the House with victories of fiscally-conservative freshmen saved or will save taxpayers at least $300 billion dollars for the two-year period 2011 and 2012 alone – a figure that may understate the saving by another two hundred billion.

go to Forbes.com

1 comment:

  1. As simplistic an analysis as I would ever hope to read. This totally ignores the impact that a properly spent $300 billion might have had on the economy.

    I can save money by not painting my house or changing the oil in my car, both of which would have long term financial consequences more significant than what I saved.

    Is this what passes for Conservative "thinking?"

    ReplyDelete