Spending Toward Prosperity

Can we Spend Our Way to Prosperity?

One, very well respected economist thinks we can. Nobel Prize-winning economist Paul Krugman has stated many times over the past five years that U.S. government spending is critical to our economic recovery and we should not cut spending to reduce the deficit – at least not right now.  

Countries that have tried reducing government spending, (see Greece); also reduce country's employment and GDP, when they reduce employment and GDP, they, of course, reduce tax revenue, which increases the deficit.

For those who worry, our government spending, although, quite a bit, higher than our government tax revenue is still relatively low as a percent of GDP when compared to that of other developed countries.

So maybe we are OK interest rates are still low and new jobs seem to be popping up.