Sunday, July 18, 2010

The Multiplier ... Yea, That's My Reason

Here in my state of Minnesota, we have a pretty large budget deficit, about 15% of spending, at $6.95 Billion for 2012. That's unsustainable long term. The Democratic candidate, Margaret Andersen Kelliher, is running on a program of increasing rspending by $2B to create jobs, but cutting $1B of 'fraud and waste. In other words, spending $2B more. The idea is that it 'would put 50,000 Minnesotans to work constructing roads, bridges and buildings'.

Given the logic of the multiplier, the government should always spend more. I think most people don't really have an opinion on the multiplier, rather, conservatives and liberals are more influenced by their appreciation or skepticism of government spending.

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