Fiscal Conservatives renew their attack on government spending complaining that Covid -19 counter measures excessively increase deficits and government share of the economy

May 31 20:05 2020 Print This Article

The American largely Republican Party dominated fiscal conservative lobby of policy advisors, academics and commentators have begun once again to try to undermine the very sensible congressional policy spending and investment plans which Congress has passed and which the House has added to in the apparent hope of aiding President Trump‘s re-election.

This weekend‘s on line Wall Street Journal featured an opinion piece by Stephen Moore in which he argued this point of view. He maintained that there is a danger of government spending rising to over 10 trillion dollars or over 50 % of the economy. The US GDP is currently 21.2 trillion dollars. Moore goes on to argue drawing on CBO projections that this level of government spending will push the American deficit to 17.9% of the GDP and the debt to GDP to 101 % as compared to 106.1 % in 1946 and a deficit of 9.8 % in 2008. He suggests strangely that this will crowd out private investment and cause a shortage of capital in global markets.

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About Article Author

Harold Chorney Economist

Harold Chorney is a Professor of political economy at Concordia university in Montréal, Québec. He worked as an economist in the area of education, labour economics and as the senior economist with the Manitoba Housing and Renewal Corporation for the Government of Manitoba from 1972 to 1978. He also worked as an economic consultant for MDT socio-economic consultants and have been consulted on urban planning, health policy, linguistic duality and public sector finance questions by the governments of Manitoba, Saskatchewan,the cities of Regina and Saskatoon, Ontario and the Federal government of Canada. He's been sought after for consultation by senior leaders of the British Labour party, MPs from the Progressive Conservative party, the Liberal party and the New Democrats on economic policy questions. His work on public sector deficits was discussed by members of the Government of France under the Presidency of Francois Mitterand.

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