In the world of fiscal policy, there are actually two big debates.
- One debate revolves around the appropriate size of government in the long run. Folks on the left argue that government spending generates a lot of value and that bigger government is a recipe for more prosperity. Libertarians and their allies, by contrast, point out that most forms of government spending are counterproductive and that large public sectors (and the accompanying taxes) undermine economic performance.
- The other debate is focused on short-run economic effects, and revolves around the “Keynesian” argument that more
government spending is a “stimulus” to a weak economy and that budget-cutting “austerity” hurts growth. Libertarians and other critics are generally skeptical that government spending boosts short-run growth and instead argue that the right kind of austerity (i.e., a lower burden of government spending) is the appropriate approach.
Back in 2009 and 2010, I wrote…
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Utopia, you are standing in it! 
Dec 13, 2016 @ 12:59:21
If only this clown read Keynes. Keynesian economics is very austere in good times. It doesn’t lead to big or small government.
Bigger government is merely a reflection of being a superior good!
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