[quote=SK in CV]First, I don’t think davelj said anything like all deficits are stimulus. Stimulus (at least in the keynesian sense) is an increase in overall and targeted spending, irrespective of the budget. Increasing of an annual budget deficit is NOT stimulative all by itself. (It can be solely the result of lower revenues, and nothing to do with increased spending.) There can be a shrinking deficit AND stimulus at the same time (though it’s unlikely that would fit into any Keynesian model).
And I would have to agree with davelj, with minor exception, spending has increased significantly almost every year for the last 30. Much of that increase has been stimulative. (Sorry, I have to repeat something here. Spending is NOT stimulative. Increases in spending are stimulative.)[/quote]
I might be inclined to agree to a somewhat more limited definition of stimulus spending. The problem becomes what do we call an increase in spending under the premise of stimulus that become permanent. We increased deficit spending massively about 3-4 years ago and it has remained at those very elevated levels. The tax base has remained roughly the same over that time period and now we’re just about at that point where the 1.2 trillion deficit isn’t stimulus spending anymore and we need a new stimulus program. We never really ended the previous one so what do we call the 1.2 trillion of deficit spending we have now if it’s not stimulus. It started that way, when did it stop being stimulus and what do we call it now?