Simplifying radically:
If the baseline budget projections show unemployment of 6.0, and we say 4.5 is a reasonable standard, we need a stimulus sufficient to move the rate 1.5 percentage points. OMB says you need a percent of real GDP to get half a percent less unemployment. So you need three percent real GDP, which means, say, five percent nominal GDP. In a $10 trillion economy, that's $500 billion. 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
