Posts Tagged ‘Recession’

Why State and Local Governments are Hurting the Recovery

Until the Great Recession, state and local governments played a remarkably constant role through down business cycles. For four decades, when the economy turned sour, state and local governments boosted their spending—mitigating the depths of recessions and adding to growth when the economy revived. (Of course, this growth was partially offset by the negative effect […]

The government and short-run economic growth

Economic growth estimates released yesterday were not good news: the economy contracted in the fourth quarter for the first time since 2009, albeit by just 0.1 percent. Commentators have mostly attributed the mild contraction to a steep drop in federal defense spending and reduced inventories—each factor cut the quarter’s growth by about 1.25 percent on […]

The Do-Nothing Fiscal Fix: Recipe for Recession

Given Washington’s endless partisan nastiness—and thanks to some updated estimates by the Congressional Budget Office–it seems like a good time to revisit an old idea: What would happen if Congress and the White House just closed up shop for a couple of years and let fiscal policy run on autopilot? The question is not so […]

Job-Killing Spending Cuts

There has been a lot of talk in Washington recently about “job-killing tax increases.” Raising taxes, the argument goes, would lead businesses to hire fewer workers and stifle our already weak economic recovery. But I haven’t heard anyone talking about “job-killing spending cuts.” In macroeconomic terms, tax increases and spending cuts have qualitatively the same […]