Conservatives have been telling us that fiscal stimulus is bad medicine for a variety of reasons. Paul Krugman discusses a new reason in this article. Fiscal stimulus is bad because governments will not behave responsibly in good times. They will continue to advocate fiscal stimulus to remain popular. Democrats, in particular, can't be trusted because, according to Mitt Romney, they purchase votes from the "moochers" by providing them with benefits.
It turns out that Republican administrations have a worse record than Democratic administrations in the use of fiscal stimulus to increase our debt to GDP ratio. Government can cut taxes and/or increase government spending to stimulate the economy. The Reagan administration cut taxes and increased military spending. The first Bush administration also cut taxes, which had to be reversed when the budget deficit grew too fast. Many believe that the tax increase led to his election loss to Bill Clinton. The second Bush administration also cut taxes substantially and it increased military spending. The debt to GDP ratio was also higher at the end of his administration than it was after he inherited a budget surplus from the Clinton administration. This contrasts with the performance of democratic administrations. All of the recent democratic administrations left office with lower debt to GDP ratios than they had inherited from republican administrations.
The historical data on fiscal policy suggests that republicans use fiscal stimulus more than democrats. Their preferred use of fiscal stimulus is to cut taxes and to increase military spending. When democrats are in office the GOP becomes more interested fiscal responsibility. They don't object to tax cuts, but they attack government spending on domestic programs that don't benefit their major constituents. They also oppose any efforts by democrats to retain the progressiveness of the tax system. Deficits are only a concern when the wrong people are in charge of fiscal policy.
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