I’m working on some other meatier posts but I wanted to sneak this one in quickly. According to most reports we’ve seen GDP growth in the last several quarter and yesterday I read a quote from one of the chaps on the committee that calls recession start and end dates that he’s ready to pronounce the recession over. I’m a little more skeptical. I think the growth being reported is sufficiently narrow and phlegmatic that after the inevitable adjustments that will be issued in upcoming months things will look somewhat different.
However, things certainly aren’t deteriorating as fast as they were last year.
Here’s my question. When we will start hearing calls from those who were so vocal about the need for counter-cyclical Keynesian fiscal stimulus that we need to start making pro-cyclical real spending reductions? How many will we hear? I suspect tallying them up won’t be too arduous a task.
Most of the usual suspects are agitating for even more spending…hence the problem with “counter cyclical spending” its really a ruse for spending they’ve wanted all along.
Aren’t the spending reductions already built in, in that the stimulus from the bill ends? Anyway, I know the answer is they thought the 1930’s defecit hawks pulled it in too fast, and that was after a 1/3rd reduction in the unemployment rate. We haven’t made a dent in that yet.
That’s not a real spending reduction that’s just a return to the baseline. According to the general theory real counter-cyclical spending increases for fiscal stimulus should be balanced by real pro-cyclical spending reductions.
I think it a bit optimistic to assume we are out of trouble already. I dont see much of a push for another stimulus from DeLong, Krugman etc. They seem to think me missed the boat on having a larger stimulus, but accept that another one is not politically feasible. OTOH, I dont really see much of a call for cuts already from the Klings, Mankiws etc. which is where you would expect it to start. Actually, I never really see a credible plan for spending cuts from anyone. I may be Panglossian, but it at least appears to be an issue now, rather than being something just ignored as it has been in the past.
Steve
“When we will start hearing calls from those who were so vocal about the need for counter-cyclical Keynesian fiscal stimulus that we need to start making pro-cyclical real spending reductions?”
Never.
” How many will we hear? I suspect tallying them up won’t be too arduous a task.”
Think of an integer less than 1, and greater than -1.
Really, where are these guys on the jobs bill? That is, essentially, a type of stimulus spending.