Stimulus vs. Austerity: USA

I keep seeing a certain political sentiment expressed. It goes a little something like this, from James Pethokoukis of the New York Post:

So what’s the problem with the Obama recovery? Why is it the weakest since the Great Depression?

Maybe it’s the Obama policies, like a stunning disregard for the trillion-dollar deficits that are likely already a dead weight on growth. Or maybe it’s the Obama guarantee of more tax hikes and regulation that makes US business too worried to hire and invest.

But it’s not too late to start shrinking unproductive government, cut debt and reduce penalties on work and investment — just like in those recoveries that we used to know.

Then there are the political cartoons, things like this:

Here’s the structure of the idea:

  • The economic recovery has been insufficiently strong
  • Therefore, we should do the opposite of what Obama has done
  • Ergo, vote Romney/Ryan 2012

The first point is correct, the other two points are simplistic and anti-intellectual, and I intend to illustrate both how and why.

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