Economists Richard Barro and Charles Reddick release the results of their study for the National Bureau of Economic Research
Stimulus Spending Doesn’t Work
Our new research shows no evidence of a Keynesian ‘multiplier’ effect. There is evidence that tax cuts boost growth.
The bottom line is this: The available empirical evidence does not support the idea that spending multipliers typically exceed one, and thus spending stimulus programs will likely raise GDP by less than the increase in government spending. Defense-spending multipliers exceeding one likely apply only at very high unemployment rates, and nondefense multipliers are probably smaller. However, there is empirical support for the proposition that tax rate reductions will increase real GDP.
Fat chance for any of those, considering how the administration is intent on bankrupting the economy.
