The Obama administration and Congress justify the vast new government borrowing and spending by asserting that it constitutes “fiscal stimulus.” Not only would eachInstead the stimulus is about the government spending on public goods that the private sector will never provide. Paul Krugman makes the point! More to the point the private sector is simply not spending, so the govenment must ... temporarily.
dollar the government borrowed and spent produce a dollar of GDP that would
never have been created had the dollar been left in private hands (a fiscal
“multiplier” of 1.0), but it would stimulate a wave of new private sector
spending, investment and employment that would generate 30, 40, 50 cents or more
of additional new wealth per dollar (a multiplier above 1.0).
Tuesday, May 19, 2009
The Council on Foreigh Relations can do better!
This article is a bait and switch! Benn Steil and his Council keep conflating the argument. The stimulus is not about the governemnt spending more on consumption goods in the private sector, as this cock-eye'd paragraph suggests