A Good Argument Against “Stimulus”
Normally I hate to pass along others’ thoughts without commentary, but this one strikes right to the heart of an issue in a way that requires no further thought. Regarding the question of whether massive government spending will stimulate the economy, Tad DeHaven over at Cato@Liberty has this response:
But isn’t spending tons of money exactly what government at all levels has been doing in recent years? According to U.S. Bureau of Economic Analysis numbers, combined federal, state, and local expenditures in 2000 were an already unhealthy 30% of GDP. Eight years and two recessions later, government spending now sucks up 35% of the nation’s economy and is trending higher. During that time we have witnessed the first $2 trillion federal budget and the first $3 trillion dollar budget.
With all the money federal, state, and local governments have been spending shouldn’t we be experiencing a boom? It would seem to me that proponents of government spending as a cure for our economic cold have it backward.
The feds have increased spending by over 50% since Bush took office, and my home state of California increased spending by about 44%. Why, then, is the only solution to this mess to increase spending even further?