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Article Artículo

Economic Growth

Government

Public Pensions as Stimulus and the Problem of Recession Deniers

Most of the country is well aware of the fact that the United States is still suffering from the effects of the recession. The 8.2 percent unemployment rate is extraordinarily high. More importantly, the employment-to-population ratio, the percentage of people who hold jobs, is still almost 5 percentage points below its pre-recession level.

The fact that the country is still suffering from the recession is essential in assessing Andrew Bigg's dismissal of the idea that public pensions can provide stimulus to the economy. Biggs is a prominent conservative economist who served in the Bush administration and is now at the American Enterprise Institute.

Biggs ridicules the idea that public pensions can provide stimulus, deriding it as the "broken window" fallacy in economics. This is the idea that economic growth could be increased by breaking windows, because we would then have to spend money to repair the windows.

In fact, because the economy is still suffering from recession -- it has large amounts of unemployed workers and idle capacity -- breaking windows would in fact generate demand and employment right now. The main problem facing the U.S. economy at the moment is a lack of demand and anything that creates demand would in fact increase growth and jobs.

CEPR / May 04, 2012

Article Artículo

Lack of Data Prevents Measurement of Aid Effectiveness, Impact

Yesterday, Vijaya Ramachandran and Julie Walz of the Center for Global Development provided a nice overview of the U.S government’s review of its Haiti earthquake response. Ramachandran and Walz found that while the review includes “some frank and enlightening assessments of USG [U.S. government] response and coordination” it contained “very little discussion of aid accountability.”

As Ramachandran and Walz point out, the authors of the review couldn’t determine the effectiveness or impact of aid because of a “disquieting lack of data.” Part of the problem seems to stem from how data collection and management is viewed by aid workers and USG employees, who made up the vast majority of sources for the review. The report states:

During the Haiti response, limitations related to information management followed two major lines. First, there were limited data available for tactical and operational decisions; and second, there were overwhelming requests for data and information from policy leaders in Washington that made systematic data collection more difficult. These demands were often driven by reports in the media.

Thankfully, the authors note that at least “some” of those they interviewed understood that the former led to the latter: limited availability of data was what generated the “overwhelming” number of requests. Others told the authors that requests for information “detracted from the on-ground response” as they were forced to “’chase down’ facts.”

Of course, data is important to the on-the-ground response as well, as the report points out:

Data collection, through surveys and assessments, is an essential component for managing a disaster response. Surveys and assessments are used to identify the needs of the affected population to direct the response. Ideally, these types of data can be used to measure the overall impact of the humanitarian response.

Jake Johnston / May 02, 2012