Wednesday, January 30, 2013

Graph Glut: Reduced Government Spending is a Drag..

...a drag on the economy that is.  Over at Wonkblog, Ezra Klein breaks down the argument that the government is holding the economy back either through its deficits or uncertainty. After dismantling both contentions, Klein concludes:
So yes, the government is hurting the recovery. But it’s not because of deficits or uncertainty, or at least, it’s hard to find evidence for either theory. The real, provable damage the government has done to economic growth in recent years has been in cutting back on spending and investment since 2010.
Without a doubt Mr. Klein comes with a liberal pedigree, but the work he and his team do at Wonkblog is always pretty solid even if it doesn't fit the prevailing narrative some would you have believe. 

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