New York Times reporters Ben Casselman and Colby Smith wrote on A1 yesterday that “There is a basic rule of thumb when it comes to the federal budget. The government should spend heavily during times of crisis – recessions, wars, pandemics – and then get its fiscal house in order when the crisis passes.” Casselman and Smith will be excused for getting the “rule of thumb” exactly backwards precisely because they got their information from economists who near monolithically believe to be true what the reporters wrote.
Governments don’t get their spending money from Pluto, rather they get it from you, me and the man behind the tree. And when politicians spend, they’re slowing economic growth. To believe otherwise is to believe that the centralized, politicized allocation of precious resources boosts the economy.
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