Sunday, July 31, 2011

The Underpants Gnome Theory of Contractionary Expansions

A debt ceiling deal has arrived. A trillion dollar in spending cuts for the next year while our economy experienced roughly 1% of growth, mainly as a result government spending and exports. Yet many conservatives see this as a victory for future growth. So the logic goes:

1. Spending less money
2. ??????
3. Economic growth

Ya, I'm seeing it now. Hooray to a lost decade!

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