Tuesday, April 07, 2009

It's not temporary 

Does Paul Krugman really want to say that the Obama plan is just a year or two of extra government spending? Let us recall:
If Krugman is arguing that some of that increase in government spending is temporary, fine. I don't know that we're arguing the multiplier is zero. Just a lot smaller than CEA chair Romer is. A lot smaller.

Federal government spending as a share of GDP is threatened to go to 23%; one would be foolish not to plan that some day that blue line needs to converge on the red one. Will you be able to get all that from those earning over $250,000 per year?

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