By Cord Blomquist
The Cato Institute is running full-page ads in the Washington Post, the New York Times, and Roll Call this week disputing the claim from President Obama that their is a consensus about the stimulus package. As Mr. Obama puts it:
“There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.”
We at CEI disagree and, as it turns out, we’re not alone. Cato’s ad includes the names of 200 economists who oppose the “stimulus” package. Among them are towering intellects like James Buchanan, who won the Nobel Prize in economics in 1986 for his work on how politicians’ self-interest and non-economic forces affect government economic policy. How appropriate.
In the ad, Cato’s club of 200 economists respond to Mr. Obama claim in big, bold-face letter, declaring:
“With all due respect Mr. President, that is not true.”
They continue by saying:
“Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, 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.
As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. 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.”