Jon S. Corzine: “I wonder if the Senator is familiar with the Federal Reserve's view of how they model or look at the economy, and how…”

“I wonder if the Senator is familiar with the Federal Reserve's view of how they model or look at the economy, and how tax cuts and spending cuts work through the economy. We just had a Joint Economic Committee meeting yesterday in preparation for that. We went back and looked at some of their models which are based on statistics and observations through time. When you were commenting earlier, I thought it would be worthwhile if I mentioned that, at least according to the Federal Reserve's models, spending has a multiplier effect of 1.4 times in the first year relative to tax cuts, which have about a half of 1 percent impact in the first year. Sometimes when you drag those out over a longer period, you catch up with the benefits of taxes, depending on the nature of them. But there is solid evidence in the economic community, and I think among the Federal Reserve, that spending can have and often does have meaningful multiplier effects on the economy. That is why so many people would argue, and I think they would argue based on fact, or at least data, that there is reason to believe that spending does have a positive impact on the economy.”