wow,
More evidence that contractionary fiscal policy is contractionary. We knew this for sure when Adam Posen showed this to be the case in Japan in the 90s and beyond.
Now we have another article confirming this from Vox wonk as I call it.
Contractionay fiscal pollicy only makes sense as Keynes said in 1936 when economic times are good. You then make room for the private sector. This is why Keynesian economics is so much more austere than classical economics in those conditions. Here in Australia we saw it first with Keating and then with Costello.
However if you introduce it in a slowdown the private sector in contracting thus so will the economy.
If only Katesy understood basic economics, Hey Katesy how many countries had a recovery using your policies? It is those damned Keynesian statisticians again?!
As a bonus Brad De Long on Noah Smith on how Keynesian economics is hot again
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