DUBLIN—Ireland's economy contracted in the third quarter due to a sharp fall in business and government investment spending as a harsh austerity program kept domestic demand depressed and unemployment high
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The Central Statistics Office Friday said gross domestic product in the three months through September was 1.9% lower than in the second quarter and 0.1% lower than in the same period of 2010.
Note a central reason for the contraction -- a decline in government investment. To argue that government spending does not help the economy -- or is not part of the economy -- is so incredibly counter-factual as to defy basic logic.
5 comments:
Decreases in government spending must be accompanied by an equivalent decrease in taxes, to spur private sector investment. I want the private sector spending money, not the government. Government takes money that people work hard to earn and spends it in often wasteful fashion.
Much more often than not the above comment's attitudes,however, reflect a person who had little or no objection to spending the trillions on the Iraq War.
Certainly not enough to be demanding troop exit once no WMDs were found, funds to be cut off for the war at that point, etc.
Just sayin.'
The government has to differentiate between spending and investing and it must increase investing and decrease spending.
Investments in infrastructure, education and basic research help the economy: NASA, Internet, GI bill and the interstate road project all increased GDP.
Rather off topic .... but ... thoughts on the quality of this guy's analysis?
http://www.johnmauldin.com/
Once upon a time (like pre-crash) I thought he wasn't half bad. But since then and the election of Obama, seems he tends to slant things more to the cut spending and hold taxes level train of thought.
gbussey:
John Mauldin writes extremely persuasively. But google him and "recession" or "double dip" and you'll see that he is the epitome of a Zombie Bear. He's completely missed the recovery of the last 2+ years and has called for a double dip about once every six months since the bottom.
I have no idea why Barry Ritholtz persists in giving him a megaphone.
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