Sunday, May 26, 2013

Bill McBride — States: Mo Money Mo Problems


Now some states are adding to the problem of demand leakage by saving (running surpluses).

Calculated Risk

States: Mo Money Mo Problems
Bill McBride


1 comment:

Ralph Musgrave said...

This is an old problem. That is, looks like states may not have actually spent stimulus money over the last few years. See:
http://johnbtaylorsblog.blogspot.co.uk/2012/03/in-blog-post-yesterday-paul-krugman.html

To moral is that if the Federal government (or any central government elsewhere in the World) gives money to local or regional governments with a view to implementing stimulus, then central government has got to breath down the necks of local governments to make sure the latter actually spend the money.