The Economist highlights three recent papers on the austerity/stimulus debate. The conclusion: stimulus is a drag.
a 1% rise in government consumption as a share of GDP eventually reduced private-sector consumption by 1.9%. Temporary spending to pick up economic slack may be useful but the long-term benefits of austerity seem clear.
North Carolina will hit the stimulus wall — $1.6 billion in one-time federal money is about to go >poof< -- a perfect time to lay the foundations for those "long-term benefits of austerity."
