The FT’s Martin Wolf is beyond pessimistic on the economy. “Worse than Japan,” he thinks. But probably not as bad as the 1930s. Wonderful. He does, however, think the U.S. and other government spending binges will at least help.
But Brian Wesbury unveils a new chart showing how government spending and unemployment are correlated, beyond the normal cyclical boosts in recessionary government spending. This reinforces work by Alberto Alesina, Robert Barro, and others.
Wesbury says government spending boosts unemployment.
