Stimulus Spending as Deficit Reduction: An Idea that Just Needs to Die

Both the Schakowsky deficit reduction plan, which I wrote about today, and the Rivlin-Domenici plan, which Veronique wrote about below, call for increases in Keynesian stimulus spending to happen immediately, right now, as an essential step in the struggle to get deficits under control eventually. Their arguments rest on one correct assumption and two incorrect ones: While it is true that restoring economic growth will make the task of reducing the deficit much easier, it is not true that short-term bursts of fiscal stimulus will get us there, and it is crazy to think that the 112th Congress will do
Read More ...