Spending vs. Cutting to Encourage Recovery

There are some things that fit well with the phrase common sense, and some that don’t. Not everything that seems complex or uncertain is outside the bounds of reality, but some things, ultimately, just don’t make sense. There is a strong political bias that “cutting spending” is a conservative principle, because it is prudent to spend less, but whether the policy is in fact conservative, or whether it works: that is another story.

There is a powerful rhetorical draw in the idea: just spend less, and everything about “the economy” —whatever that means— will improve. This is like saying, if you provide less opportunity for investment, there will be more opportunity for investment; or, if you reduce the wealth available, the wealth available will increase; or, you need to burn the village in order to save it.

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