Robert J. Barro: Stimulus Spending Doesn't Work - WSJ.com.
As someone who is not a fan on increased government spending, I appreciate the empirical analysis in this article. A related article by Nick Gillespie highlights Barro's claims about government spending increasing with GDP. To wit, total government receipts in 1950 were $39.4 billion and in 2008 were $2,524 billion yet we're still running deficits. Government spending expanded to spend the money it collected. This is what worries me - last year's spending becomes the baseline for growth of this year's spending. Thus spending continually increases. I can't confirm it empirically, but wouldn't be surprised if the 9 budget surpluses of the last 60 years were the result of unexpected increases in tax receipts and NOT the result of cuts in government outlays.
As someone who is not a fan on increased government spending, I appreciate the empirical analysis in this article. A related article by Nick Gillespie highlights Barro's claims about government spending increasing with GDP. To wit, total government receipts in 1950 were $39.4 billion and in 2008 were $2,524 billion yet we're still running deficits. Government spending expanded to spend the money it collected. This is what worries me - last year's spending becomes the baseline for growth of this year's spending. Thus spending continually increases. I can't confirm it empirically, but wouldn't be surprised if the 9 budget surpluses of the last 60 years were the result of unexpected increases in tax receipts and NOT the result of cuts in government outlays.
