Spending to GDP

Just one brief thought. Thinking of “austerity” in terms of how spending relates to GDP isn’t that productive. Take the city of Chicago, for example. If the city borrows $100 million and spends it the city’s GDP goes up by $100 million. That doesn’t mean that city revenue increases or that there’s been some underlying improvement in the city’s economy. It just means the city has more to spend.

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