Wednesday, May 18, 2011

What multiplier?


Advocates of more Congressional spending claim a GDP multiplier effect. So lets look, on the right we have growth rate of GDP. On the left we have congressional spending as a percent of GDP. Can we find a multiplier greater than one?

I am still looking, but one thing I do notice, a downward trend on GDP growth rates. I see Reagan the Communist and his finger prints., he participated in the first growth slowdown.  I see government spending down, relatively, under the Clinton administration, below 19% just prior to the dot com bust. Then I see the next Republican Communist participating in another permanent slowdown.

I suspect we are living in a constrained global economy with hysterical politicians who create Congressional spending volatility, bailouts and war.   Our economy is dominated by growing input shortages and lunatic government elites.  In that morass we are not likely to get any sensible multiplier.

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