Saturday, September 21, 2013

Multipliers?




Here I have rate of change in real gdp divided by rate of change in federal outlays. Clinton had the high multipliers, Reagan had a few. Lil Bush less than one, and Obama is in the mud. Also plotted is the deficit as a percent of GDP. Multipliers greater than one are associated with declining deficits. Cause and effect? Mainly it takes sound government to reduce deficits.

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