Kudlow’s Money Politics

Larry Kudlow’s daily web log of matters political and financial.

Bigger Government Is Not Stimulus


Here’s another video from my friend and senior fellow at the Cato Institute, Dan Mitchell — one that is particularly timely — on Keynesian “stimulus” proposals.

Dan notes in his email to me, “With Reuters reporting that Obama may propose as much as $1 trillion (yes, trillion) of new spending, which would be in addition to the huge expansion of government under Bush, there is a desperate need for more education on this issue.”

Amen to that.

As I recently wrote, government cannot spend our way into prosperity. What we need is a revival of the dormant animal spirits. They have been beaten down by a brutal bear market in stocks, the ongoing housing slump, and all the myriad blockages to credit availability. A bunch of new spending won’t do the trick. Lower tax rates will.

In other words, government policy must make it clear that new successes will be handsomely rewarded.


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