LIKE USING A NUKE TO STOP THE LEAK...:

Cameron Bets on Growth From Austerity as U.S. Delays (Simon Kennedy and Rich Miller, 6/22/10, Bloomberg)

World leaders from the U.K.’s David Cameron to Naoto Kan of Japan are betting they can deliver fiscal austerity without derailing economic prosperity. History suggests they may be right.

Governments have proven they can spur expansion by focusing their belt-tightening on spending cuts rather than tax increases, according to studies by Harvard University professor Alberto Alesina and Goldman Sachs Group Inc. economists Kevin Daly and Ben Broadbent.

“There have been mountains of evidence in which cutting government spending has been associated with increases in growth, but people still don’t quite get it,” Alesina said in an interview. He made a presentation to European finance chiefs on the topic during their April meeting in Madrid.

...the supposed pragmatist-in-chief can't do what works because it violates party ideology.

Posted by Orrin Judd at June 22, 2010 5:44 AM