No Net Increase in Government Spending During the Recession

Toro

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Sep 29, 2005
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Why? Because despite the record federal $787 billion stimulus program - of which less than a third has been spent - the increased government spending at the federal level has been offset by decreases at the state level.

This note shows that the aggregate fiscal expenditure stimulus in the United States, properly adjusted for the declining fiscal expenditure of the fifty states, was close to zero in 2009. While the Federal government stimulus prevented a net decline in aggregate fiscal expenditure, it did not stimulate the aggregate expenditure above its predicted mean. We discuss the implications of limitations on states' ability to run deficits for the design of fiscal stimulus at the federal level. We devote particular attention to intertemporal moral hazard concerns in a federal fiscal system, and ways to address these concerns.

On the ease of overstating the fiscal stimulus in the US, 2008-9
 
Ironically, the worst offending state is Republican run California where the Governator has decreased the spending by an enormous percentage. Arnold has laid off so many dutiful servants that he, alone, is responsible for the great increase in unemployment. Consider this, if it were not for Schwartzenneger run California, this minor recession might never have grown into the Greatest Recession.

California is looking towards throwing the Recession causing Republicans out in the coming election. Good riddance!
 
The real problems with Stimulus Programs is that Republican Fat Cat Bankers and Politicians can steal from them and pad their pockets with the excessive greed they always seek after.
 

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