John B. Taylor shows an interesting graph.
I understand boosting federal spending during a downturn for the ordinary Keynesian reasons of filling in the gap between current demand and total production. We’ve been in recovery for nearly two years. If you don’t plan on reducing federal spending during a recovery, when will you lower it? And why doesn’t the failure of the economy to recover causing anybody to doubt the putative total production?
Taylor is lying or being deliberately obtuse. First, as shown by Rogoff and Reinhart, increased spending and debt is the norm in a financial crisis. It has, IIRC, often been worse than what we experienced. Next, spending is projected to come down as the stimulus goes away. Last of all, the true Keynesians say that spending needs to drop when unemployment is down and the economy on better footing.
Taylor ends by making the unsupported assertion that we will have growth if we have 2007 levels of spending. Magic pony time. I hope he explains what he thinks will replace private and commercial real estate in our economy.
Steve
steve nailed it: exactly what is a “pro-growth” budget, and what methodology does he use to arrive at it? How does reducing spending spur growth? The only information he gives is that the line is green, which I suppose means it’s good.