While the media and the new administration would like to have us believe there is no dissagreement among economists that President Obama's massive stimulus plan is absolutely necessary, here are 200 leading economists, which include Nobel laureates and other very respectable scholars from across the country, who beg to differ.
The Cato Institute is running a full page ad in the Washington Post, New York Times and Roll Call this week with a letter showing that whoever says, "all economists agree on stimulus" is wrong.
The letter, which is signed by 200 economists, reads:
Notwithstanding reports that all economists are now Keynesians 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.
Full disclosure: Chris Moody is the Manager of New Media at the Cato Institute.