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MrCheap
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Will more government spending help the economy?

submitted on February 9, 2009 by MrCheap in "Member's Lounge"
This was in Wall Street Journal today.
http://cato.org/special/stimul.....imulus.pdf

There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.
— PRESIDENT-ELECT BARACK OBAMA, JANUARY 9 , 2009

With all due respect Mr.President,that is not true.

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.
 

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  • 16121
    MikeG
    learner
    Posted by MikeG on February 10, 2009 [reply] 0 0
    Well the stimulus package passed today, but the Treasury Secretary didn't appear to have a plan during his press conference today. The market tumbled. Not very reassuring!
  • 16150
    Solstice
    professor
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    11 4 1
    Posted by Solstice on February 11, 2009
    [reply] 0 1
    Ding! We have a winner! Someone has been paying attention to history as well.

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