Wednesday, February 18, 2009
Gov't Spending Doesn't Work? The Facts Prove Otherwise
Below is a chart from the government's own historical tables on the budget, from 1930 until now. The graph is government spending as a percentage of GDP. Large increases in spending were followed by boom times, while contractions in spending preceeded recessions or market downturns.
Now, the dirty little secret that "supply-siders" will never admit to: that spending under Reagan was the highest in the post WWII period. That, along with tax cuts, put the economy on steroids. However, without the spending (tax cuts alone), there never would have been a "Reagan boom."