KEYNSIANS: “Hey man, you know where I can get some stimulus?…I need that good stimulus, man…”

Matthew Mitchell: “The tendency for spending to ratchet up during a crisis is important because it suggests why fiscal stimulus is unlikely to be economically helpful. In an oft-repeated quote, economist and stimulus advocate Lawrence Summers has argued that stimulus ought to be “timely, targeted, and temporary.” Otherwise, it is unlikely to be economically helpful. The fact that spending rarely returns to pre-crisis levels suggests that governments may find it impossible to implement stimulus in the way Keynesians such as Summers would like to see.

[Mercatus Center]

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