Thursday, 1 April 2010

Look, can we just shitcan this Keynesian crap now?

Timmy has an excellent dissection here:

The car scrappage scheme has protected about 4,000 jobs in the UK auto industry, Government estimates have claimed.

At a cost of £400 million.

As stimulus measures go this isn’t all that effective. The number of jobs saved is of course at the high end of estimates: no, don’t be silly about this, this is the people who spent that money defending the decision to have done so. Of course they’ve put the best gloss on it.

So £100,000 per job saved. Given median incomes of around £25,000 saving a job for a year costs four times what that job pays for a year. So we have a multiplier of 0.25…..which really, really, isn’t the sort of number which gives one confidence in the merits of Keynesian spending. For that we want a multiplier of over 1.

And as for the idea that such Keynesian spending pays for itself….well, the tax take on £25,000 is something like £8,000 (income tax plus NI) so we’re spending £100,000 to get £8,000 back in tax……which again doesn’t look like such spending pays for itself.

This shit just never works. No government spending has ever been shown to "pay for itself", let alone magically create more wealth. In the example above, it would have been scads cheaper to just let businesses go to the wall and give everyone two years' pay. And in two years, anyone can find a job if they want it. I also bet that not all of the businesses would have folded or that all those 4000 jobs would have gone, either.

I know it's appealing to think that the government is trying to help. But for fuck's sake, when it's making everyone worse off, how the cunting fuck is it helping?

Tax and spend just doesn't work. End of.


Antisthenes said...

The car scrappage scheme actually subsidised workers in other countries and was of little benefit to the UK at all.

sixtypoundsaweekcleaner said...

Jonah curse. It just brings down everyone.