Economists slam Obama's 'Stimulus' Package

Alex Singleton, London Telegraph

http://blogs.telegraph.co.uk/alex_singleton/blog/2009/01/28/economists_slam_barack_obamas_stimulus_package

The line from Barack Obama and Joe Biden is that all economists agree with a stimulus package to expand government spending. So they won't have been happy to see a full page advertisement in today's New York Times disagreeing, signed by around 200 academic economists, including three Nobel prize-winners.

Economists speak out against the stimulus package

According to Mr Biden: "Every economist... from conservative to liberal, acknowledges that direct government spending on a direct program now is the best way to infuse economic growth and create jobs."

Barack Obama said earlier this month that: "There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy."

But the economists who signed the advert, funded by the Cato Institute in Washington DC, say that: "we the undersigned do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s."

They propose instead that: "To improve the economy, policymakers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth."

This is a message that, over on this side of the Pond, Gordon Brown should also listen to - but won't.