Thursday, February 2, 2012

A Mortal Sin or a Venial One?


If I am allowed the above expression….

If I interpret it correctly, the second graph you display shows a dramatic increase in pending for 2 years followed by a decrease to levels well below the Bush years. And this spending occurred during the worst economic crisis of our middle aged lifetimes. Many of the most hated (by some) interventions, such as TARP, began in late 2008, before the current administration assumed office.

The reasonable question is to ask whether the money was well spent and where the economy would be if it hadn’t been spent. I’m no economist but the current experience with austerity and the economic debacle 
it is producing in large parts of Europe makes a powerful  argument that contracting public spending in a recessionary period produces nothing but harm and inevitably leads to more debt as revenues shrink

We agree that spending should be reduced. The question is when, and how.


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