Earlier this month, United States President Barack Obama began peddling his transparently Keynesian 'stimulus package' to the American people. Stimulus economics, he seemed to contend, has achieved universal endorsement among experts and so it would be grossly irresponsible to fail to allow the capable hands of the government to redirect funds from private pockets to public coffers.
Barack Obama on 9 January 2009:
There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.
Unfortunately for the president, several hundred economists beg to differ.
Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.
Damn right.
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