It is quite clear that expansionary fiscal policy is not about the size of federal government: if you want it to shrink, you can go for tax cuts, and if you want it to increase you go for increased spending. However, there is no reason to not use expansionary fiscal policy because you believe in one or the other proposition regarding the size of the government. The US has a valuable lessons to teach to the austerity crowd in Europe:
It’s the economy, stupid!
econoblog 101
US Congress has passed $1.8 trn spending measure…
Dirk Ehnts | Lecturer at Bard College Berlin
US Congress has passed $1.8 trn spending measure…
Dirk Ehnts | Lecturer at Bard College Berlin
2 comments:
"It is quite clear that expansionary fiscal policy is not about the size of federal government: if you want it to shrink, you can go for tax cuts, and if you want it to increase you go for increased spending. However, there is no reason to not use expansionary fiscal policy because you believe in one or the other proposition regarding the size of the government. The US has a valuable lessons to teach to the austerity crowd in Europe:"
I strongly suspect that they are insincere that they want a small state as a matter of principle.
But to me there is a much bigger deceit in framing this discussion in terms of size of the state: because my long standing impression is that "size of the state" is for most participants just dissembling, where the real matter of contention is redistribution, under the assumption that currently the state budget has a downward redistributive bias, so a smaller state implies less downward redistribution, and a bigger state more downward redistribution.
But when the state redistributes upward then conservatives amazingly love big state "interference", such as bailing out the very rich financial sector, or funding huge foreign wars and ever bigger resources for the surveillance of subjects.
You can read "small state" conservatives arguing that support of the poor and disabled (but curiously, not the support of older and retired "rich ladies in mansions") should be left to voluntary community contributions collected by charities; but they somehow never argue that sending troops to Iraq should be funded by public voluntary collections too. Which was a tradition in the (even relatively recent) past, where regiments and ships were sometimes funded by private individual donations.
The confusion between "bigger state" and "downwards redistribution" is a favorite tool of the right, it is framing the issue in terms of "liberty" , and I am amazed that people support that tendentious framing.
The mantra of the US right is low taxes, small government, strong military, and family values. These are all tested phrases that have been shown to work in attracting American voters.
The US left has no corresponding slogan. By implication then, the default position of left is high taxes, big government, and a weak military, and opposition to traditional values. This is the way the left is attacked incessantly by the right.
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