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  • Spending Cuts Are Good for the Economy

    Reducing budget deficits by cutting government spending has a stronger record of economic stimulus than either reducing the deficit with tax increases or increasing government spending. That’s what Harvard economists Albert Alesina and Silvia Ardagna have found in their recent research. They examined 107 instances of large reductions (at least 1.5 percent in one year) in budget deficits as well as 91 instances of large increases (over 1.5 percent in one year) in budget deficits over the past 40 years.

    They found that when an economy expands following deficit reduction, spending cuts were the largest part of the adjustment. At the same time, when recessions followed deficit reduction, tax increases were the predominant policy. The authors also found that when budget deficits increased, tax cuts had a more expansionary impact on the economy than spending increases.

    Writing in the Wall Street Journal, Alesina points to the reason for these findings: Spending cuts “signal that tax increases will not occur in the future, or that if they do they will be smaller. A credible plan to reduce government outlays significantly changes expectations of future tax liabilities. This, in turn, shifts people’s behavior. Consumers and especially investors are more willing to spend if they expect that spending and taxes will remain limited over a sustained period of time.”

    Cross-posted at InsiderOnline.

    Posted in Economics [slideshow_deploy]

    One Response to Spending Cuts Are Good for the Economy

    1. Thomas D Dowling U.S says:

      The End of the Fed is a Real Stimulus Plan that Keeps on Giving!

      The Federal Reserve Act was passed in 1913, shortly after the 16th amendment was ratified. The 16th amendment allowed our country to collect the taxes required to pay the annual dividends to the Fed's shareholders, who bought their original 300 shares for only $100 per share. By law, the United States can easily abolish the Fed by buying back these shares at a cost of "only" $450 million and replace the current national debt with non-interest bearing currency as it becomes due.

      The Interest "We the People" pay on our National Debt is now over 700 Billion Dollars a Year.

      Over $700,000,000,000.00 a Year Interest on Our Money Created AS DEBT – Out Of Thin Air!

      It's OUR money. Why are we paying this interest?

      "Few men have virtue to withstand the highest bidder." ?George Washington

      "We the People" have paid Interest on Our Own Money for almost a hundred years to The Fed to create the wealth they have used to corrupt Our own government.

      Our government has now become a big fat Monster! This Monster has been stealing from U.S. for a hundred years now. It's time to drastically trim the fat.

      "My reading of history convinces me that most bad government results from too much government." —Thomas Jefferson

      "The essence of Government is power; and power, lodged as it must be in human hands, will ever be liable to abuse." —James Madison

      Both the Republican Party and the Democrat Party have lied to U.S. The truth about the Federal Reserve is easy to research and simple to understand. We must never again allow private banks to create or control Our money! Why should we pay interest on OUR money? "We the People" must not listen to their lying doublespeak anymore. The research is everywhere now and not hard to grasp.

      "It is well enough that people of the nation do not understand our banking and money system, for if they did, I believe there would be a revolution before tomorrow morning." –Henry Ford, founder of the Ford Motor Company.

      Complete Accountability to "We the People" who hold the True Power prevents Fraud, Abuse and Corruption. Good government must ALWAYS be kept In Check.

      "The Government should create, issue, and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. Money will cease to be master and become the servant of humanity." ?Abraham Lincoln

      The Fed Is and has always been Our Country's worst nightmare and the "root" cause of Our massive government Corruption!

      Since 1913 these freeloaders of Society who have profited undeservingly from Our labors, have only repaid U.S. by corrupting Our government. They want complete Power and Control over U.S. and Our children.

      "We the People" are the True Power and government is merely a tool to serve U.S.

      "We the People" can no longer tolerate lies, deceit and corruption from any of our "public servant" employees.

      They work for U.S. ? Period!

      Corruption in all political parties has been the norm since 1913. Extreme and harsh penalties for the violations of the Trust of "We the People" must now become the norm along with complete accountability to U.S.

      "We the People" were deceived and allowed the "few" without any oversight to control Our money and the quantity.

      "Controlling of the quantity of national money is THE most important political question humans can ponder. Freedom cannot long survive when bankers are in control of the quantity of a nation's money. Their debt money system is THE cause of most of the bad things in this world; war, poverty, hunger, misery." –Bill Still

      Obama and all the signers of the resent Financial-Overhaul bill only put more Power and Control into the Hands of the Federal Reserve and want U.S. to perceive it as good for U.S.

      They are LIARS!

      They sold U.S. out to their masters who really could care less what type of government is in place.

      It's always about Power and Control!

      Power and Control in America belongs 100% to "We the People." ? Period!

      The End of the Fed is Our first step.

      It was realized that the "BANKSTERS" would have to become PARTNERS with the POLITITIANS and that the STRUCTURE of the CARTEL would have to be a CENTRAL BANK

      The Federal Reserve Bank is Set Up as a Privately Owned Banking Cartel Controlled by a Small Elitist Group of Powerful International Bankers.

      This Same Cartel Owns Other Central Banking Systems Worldwide Including the IMF (International Monetary Fund) and World Bank.

      http://www.tomdavidd.com/blog/

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