This has been a pretty interesting discussion today, but I have to take exception to this one.
[quote=harvey][quote=davelj]
Actually, we have been engaging in stimulus spending for the past 30 years – the Powers That Be just didn’t realize it or label it with that name.[/quote]
I agree that it can be argued that all deficits are “stimulus.”
[/quote]
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.)
