Fiscal Stimulus
The National Bureau of Economic Research, which is not a government agency but does have a relationship with the federal government, has analyzed three possible governmental responses to a recession:
- deficit spending
- deficit financed tax cuts
- increased spending financed with increased taxes
The results?
We find that deficit-financed tax cuts work best among these three scenarios to improve GDP
Translation: Obama’s spend-spend-spend policies are the wrong approach. Let’s cut taxes.