Keith Hennessey provides a rebuttal argument to Jay Carney’s damage control on the bad news about GDP growth of yesterday, the basic contours of which have become today’s talking points. Note the guest appearance in Mr. Carney’s remarks of folk Keynesianism, about which he appears to be somewhat confused. The only way that the president’s plan can count as stimulus in that view is if you assume that the president’s lying about offsetting spending cuts and tax increases. Note that I don’t make that assumption but Mr. Carney apparently does. With friends like this, etc.
To repeat my basic position: GDP decline bad. At this point in the business cycle I’m relatively indifferent to why it went down. Any decline at this late phase of a phlegmatic recovery could kick its wobbly legs out from under it.