The Cato Institute has taken out a full page ad in some major publications stating that “we the undersigned do not believe that more government spending is a way to improve economic performance.”
From their site:
President Obama says that “economists from across the political spectrum agree” on the need for massive government spending to stimulate the economy. In fact, many economists disagree. Hundreds of them, including Nobel laureates and other prominent scholars, have signed the statement that appears in the Cato Institute’s ad in the New York Times and in other national publications.
And here’s the main text of the ad:
Notwithstanding reports that all economists are now Keynesians [this is the view that holds that increased government spending is the way to spur the economy] and that we all support a big increase in the burden of government, we the undersigned do not believe that more government spending is a way to improve economic performance.
More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan’s “lost decade” in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today.
To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.