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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsEconomists Agree, Cutting Spending Now is Bad for Recovery; Why is Fox Still Lying?
http://www.alternet.org/media/economists-agree-cutting-spending-now-bad-recovery-why-fox-still-lyingFox contributor Gary Kaltbaum today said that it's "insane people" who believe that "if you cut spending, it's gonna hurt the economy." In fact, actual economic experts agree that cutting spending during weak economic growth damages recoveries and depresses employment.
This was the conclusion of the October 2010 World Economic Outlook report, in which the International Monetary Fund examined data from the past 30 years to see what impact austerity measures had on weak-performing economies. The IMF wrote:
A key result is that fiscal consolidation is typically contractionary. A fiscal consolidation equal to 1 percent of GDP typically reduces real GDP by about 0.5 percent after two years. The effect on the unemployment rate is an increase of about 0.3 percentage point after two years. The results are statistically significant at conventional levels. Overall, the idea that fiscal austerity stimulates economic activity in the short term finds little support in the data.
But according to Kaltbaum, this belief is shared only by "insane people."
Discussing the recent House-passed spending bill to avert a government shutdown, Kaltbaum complained that the United States will never eliminate the deficit, saying:
KALTBAUM: It's never gonna get done. Look, spending, for whatever reason, just continues to go higher and higher and higher. And all this rhetoric from both sides, even from the Republican side -- it's just not gonna get done. The problem is, somehow we got to the point where everybody believes, or at least I think insane people believe that if you cut spending, it's gonna hurt the economy.
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Economists Agree, Cutting Spending Now is Bad for Recovery; Why is Fox Still Lying? (Original Post)
xchrom
Sep 2012
OP
JHB
(37,128 posts)1. Because it's Fox.
pampango
(24,692 posts)2. Facts (the effects of fiscal and monetary policy) only matters to 'pointy-headed liberals'.
Those few Fox folks who may understand the positive effect of spending in a weak economy don't want the economy to improve for partisan reasons.