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Thursday, August 13, 2009

Is the Stimulus Working?

Over at Cato, Chris Edwards asks Is the Stimulus Working?, taking a look at the components of GDP. As Edwards notes, "Government expansions usually cause private sector contractions" and the data indicates that trend has held up - since 2008, consumption is down, government spending is up, and private investment is plunging.

So the stimulus might be said to be “working” by keeping government fat while productive private investment falls off a cliff.

But is that what Americans really want in an economic recovery? Do we want an economy that ”recovers” with a bigger government workforce and a smaller private workforce? Do we want a ”recovery” where the government directs more of the nation’s investment and private businesses less of it? It certainly doesn’t sound like a prescription for long-term growth to me.

1 comment:

Anonymous said...

We should've done that blue state secession back in 2004, when it was a hot idea. Look where we are now.