Deficit hawks, like Cato? Cato consistently criticized president Bush for his spending increases and his foreign wars.
[QUOTE="HomicidalCherry"]Unless it causes hyper-inflation or tax hikes in the middle of a recession, spending will have no immediate negative affect on our economy.HomicidalCherry
well not as drastic, but it certainly has a negative effect by distorting the structure of production.
A large contraction in government spending would actually hurt the economy, if anything as it is just one less entity that is actually buying and spending money and encouraging growth.HomicidalCherry
Puh-leeze! You and your keynesian economics. An economy is human interaction that "seeks" to solve the problem of scarcity, which is the limited amount of resources that must satisfy unlimited demand. So an economy is measured by how much it produces, not really by how much it demands. You can't spend or demand your way to growth.
Now, that being said, cutting government spending is necessary for the economy to readjust. Government spending creates entities which are totally dependent upon government spending for their survival, rather than actual consumer demand.
Government spending can actually be a very powerful catalyst for economic growth or (in this case) recovery. The Great Depression itself was ended by the massive government spending that followed our entry into WWII.Actually the great depression didn't really end until 1946. Its extremely difficult to say that the economy recovered during world war two considering that private investment plummeted during world war two and only rebounded after massive cuts in government spending after the war. Furthermore, its difficult to measure economic growth during world war two because the United States had become a total command-economy.HomicidalCherry
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