“Something happened a long time ago in Haiti and people might not want to talk about,” Robertson said Tuesday on his 700 Club show. “They were under the heel of the French, you know Napoleon the third and whatever. And they got together and swore a pact to the devil. They said ‘We will serve you if you will get us free from the prince.’ True story. And so the devil said, ‘Ok it’s a deal.’ And they kicked the French out. The Haitians revolted and got something themselves free. But ever since they have been cursed by one thing after another.”

He also thinks this is a blessing because now anybody that doesn’t die can build some better buildings especially if they turn to god.  I’m assuming he is talking about the 5% of Haitians who currently don’t claim Christianity as their religion (1).  I’m betting those 5% are also gay and don’t tip their waitress well.

1)    http://en.wikipedia.org/wiki/Religion_in_Haiti

http://www.anotherdamnblog.com/uploads/2009/Stimulus/GD

Originally found at:  (http://www.swarthmore.edu/NatSci/cpurrin1/textbookdisclaimers/)

http://www.youtube.com/watch?v=p7SzB58qHI0&feature=player_embedded

http://www.tmz.com/2010/01/06/kfc-australia-racist-commercial-kentucky-fried-chicken/?mediaKey=125808e2-b15b-45b3-8a4d-e9b9e1c3e6d2&isShareURL=true

-ep

https://implicit.harvard.edu/implicit/demo/takeatest.html

In the test I took I showed a slight preference for the Democratic party and no preference to the disability programs.

-ep

Clearly there are many factors that affect the economy outside of the scope of the of government spending.  One would hope a large enough data set and an effective regression analysis should allow you tease out the impact government spending has even with all other factors considered.  While I concede that how the government spent the money might significantly change how it impacts the economy, for this post I am focusing on the aggregate spending of the federal government.  This post will analyze the impact spending has on the two broadest measures of economic health:  GDP and Unemployment.

Notes/ Facts:

• Spending and GDP growth are inflation adjusted.  (IE. If spending increased by 5% and inflation was 3% I use 2% as the spending increase)
• GDP data is from 1923 forward
• Unemployment data is from 1948 forward
• Times government has reduced speding from the previous year: 10
• Times governement has increased speding from previous year: 76
• Times government has increased spending by 5 or more percent: 34

Analysis
My analysis consisted of plotting the inflation adjusted %change in spending by year against GDP and Unemployment respectively.  This makes for nice charts but is not that meaningful from a statistical standpoint.  For that I did a linear regression (thank you stats class and Excel 2007) and determined the R-squared value and produced a histogram.  Essentially the R-squared value tells you have often you can expect your model to produce an accurate result and the associated “Significance F” tells you how confident you can be in your R-squared value.

GDP

GDP vs Spending

GDP and Govt. Spending Histogram

R-squared values:

• Avg of year and following year - .22
• Same year - .21
• Avg of year and next two (3 total)- .14
• Following Year - .12
• Third Year - .0014

Unemployment

GDP vs. Spending Chart

GDP and Spending Histogram

R-squared values:

• Avg of year and following year - .004
• Same year - .05
• Avg of year and next two (3 total)- .009
• Following Year - .02
• Third Year - .002

Conclusion

Historically government spending has almost 0 statistical impact on unemployment and a fairly low predictable impact on GDP.  The GDP histogram shows that the line does have a positive slope, meaning that if you increase government spending generally you are going to increase GDP.  However based on the model above, if you try to predict how changing government spending is going to impact the economy you will only be correct about 1-5 times.  Admittedly this is a crude model and I might refine it in the future to determine if how the government spends money has a stronger correlation to the economic performance.  However, based on the model above it doesn’t appear that government spending can directly and consistently produce predictable results in the two broadest economic measures we have.

Meaning that government spending most likely won’t do much to stimulate the economy.
Here are links to my much labored over worksheets, please feel free to play with the number and let me know what you find:
Cleaned Raw Data
Analysis

Thanks and as always comments are welcome, encouraged and appreciated.

-ep

Sources

1. Unemployment Data- US Dept. of Labor (http://www.dol.gov/)
2. Inflation Numbers- Bureau of Labor Statistics (http://www.bls.gov/CPI/)
3. US Government Spending & GDP- (http://www.usgovernmentspending.com)

If you are interested in learning more about statistics:
http://cameron.econ.ucdavis.edu/excel/ex52bivariateregression.html
http://en.wikipedia.org/wiki/Coefficient_of_determination