Russ Roberts on the wisdom of stimulus packages.
My favorite bit:
The money has to come from somewhere. If you raise taxes to fund the plan, the people who are taxed are poorer and they’ll spend less. If you borrow money to fund the plan, the people who buy the government bonds have less money to spend and that offsets the stimulus. It’s like taking a bucket of water from the deep end of a pool and dumping it into the shallow end. Funny thing—the water in the shallow end doesn’t get any deeper.
(Ha! Update: Bryan Caplan weighs in on irrational voters and stimulus packages.)
-Max Borders
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