Department of "Huh?": Do They Understand What's in the Health Care Bill? Edition
Econ 1: Fall 2010: U.C. Berkeley: Files for October 20 "Short Run and Long Run" Lecture

Expansionary Government Spending to Boost the Economy Was Not Tried--Except, of Course, in China

Even More On The Origins of the Deficit - NYTimes.com.png

Paul Krugman

Even More On The Origins of the Deficit - NYTimes.com: Let’s look at trends in GDP, spending, and revenues over two periods — one designed to capture “normal” growth, the other the economic crisis.... During the pre-crisis period, spending grew slightly faster than GDP — that’s Medicare plus the Bush wars — while revenue grew more slowly, presumably reflecting tax cuts. What happened after the crisis? Spending continued to grow at roughly the same rate — a bulge in safety net programs, offset by budget-slashing at the state and local level. GDP stalled — which is why the ratio of spending to GDP rose. And revenue plunged, leading to big deficits.

But I’m sure that the usual suspects will find ways to keep believing that it’s all about runaway spending.

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