Wednesday, January 7, 2015

No, shit...

Government Spending Does Not Help the Economy

Frank Shostak

Some economists such as Nobel Laureate Paul Krugman hold that during an economic slump it is the duty of the government to run large budget deficits in order to keep the economy going. On this score — given that from 2011 to 2014 the rate of growth of real gross domestic product (GDP) hovered at around 2 percent — many experts are of the view that the budget deficit, which stood at $483 billion in 2014, wasn’t large enough.

According to this way of thinking, if overall demand in the economy weakens on account of a weakening in consumer outlays, then the government must step in and boost its spending in order to prevent overall demand from declining. Note that government outlays in 2014 stood at $3.5 trillion against $1.788 trillion in 2000 — an increase of 96 percent...

Read the rest here:

No comments:

Post a Comment