How to blow $10 billion in one hit

Peter Martin: We've only just begun to try to stimulate the economy

Hmm. Peter Martin today explains why the Rudd government's Christmas bonuses were never likely to have lasting effect on holding off a recession, and didn't even really work to keep retail strong. (Adjusted for inflation, Christmas retail figures were not as good as they first sound, and in fact were barely above the preceding level.)

Funny, I thought he was pretty supportive of the idea when it was announced, although I must admit he did note that its effect would "fade" early this year. (This didn't seem to be an actual point of criticism though.)

Now he says:

Professor John Taylor of Stanford University devised the so-called Taylor Rule used by central banks to set interest rates. He told the American Economic Association's annual meeting in San Francisco this month that neither of the Bush government's two emergency tax rebates in 2002 and 2008 had made any difference to consumer spending. The problem was that they were temporary. We adjust our spending based on what we think we are going to be earning, not on the dollars that happen to fall into our pocket on any given week.

Given that the first of these failed rebates was in 2002, weren't Peter and other economics commentators aware that they did not make significant change to consumer spending? (I didn't know either, but economics is not something I profess to know much about.)

On 16 October last year I wrote:

I am still waiting to see more criticism of the short fuse of this spending too.

It seems economics commentary is a game anyone can play at these days.