Over at Cato, Chris Edwards asks Is the Stimulus Working?, taking a look at the components of GDP. As Edwards notes, “Government expansions usually cause private sector contractions” and the data indicates that trend has held up – since 2008, consumption is down, government spending is up, and private investment is plunging.
So the stimulus might be said to be â€œworkingâ€? by keeping government fat while productive private investment falls off a cliff.
But is that what Americans really want in an economic recovery? Do we want an economy that â€?recoversâ€? with a bigger government workforce and a smaller private workforce? Do we want a â€?recoveryâ€? where the government directs more of the nationâ€™s investment and private businesses less of it? It certainly doesnâ€™t sound like a prescription for long-term growth to me.