- Many liberals are circulating this around FB...any thoughts? I know you're a numbers guy!
This CBO analysis counts only the direct effects of the government expenditure, what Frederic Bastiat called the "seen." The indirect effects -- Bastiat's "unseen" -- are much more damaging than the direct are helpful.
Even Christina Romer, the former Chair of the President's Council of Economic Advisers, has done research that showed that government spending has about one third the impact on GDP that tax cuts do. And spending that creates deficits has the same effect as a tax increase. It creates inflation -- or in the present instance keeps prices from falling -- and taxes all savings by ensuring that it will be worth less in the future than it ought to be.
It is precisely these negative effects that are keeping the private sector on the sidelines, and preventing the robust recovery that would otherwise be creating three times as many jobs as the government spending!
