Re: How Much Is Enough

[<christian11@xxxxxxxxxxxxxx>]

pen-l@xxxxxxxxxxxxxxxxxxx wrote:
Simplifying radically:

So if the multiplier is 1.5, must we advocate a $333 billion
stimulus on an annual basis to force unemployment down
to 4.5%?

mbs

Why would the spending multiplier be this low? If, simplifying very radically, it's 1/1-mpc+mpc(t)+mpm, and the tax rate is going down, and generally mpc is, what?, .6 or something, then why wouldn't the multiplier be much higher, like in the 2.5- 3 range?

Christian