Ryan Streeter
John Taylor's excellent column in today's Wall Street Journal contained a chart he has used separately on his blog at the Hoover Institution. It's one of those "it says it all" kinds of charts.
Whatever the theories are that explain unemployment, investment as a percentage of GDP sure looks compelling.
In his WSJ piece, Taylor's point is that stimulus payments to individuals and states, a 4% increase in the share of federal spending to our economy, and the rounds of quantitative easing have given us no evidence of positive economic effect; and so we need instead to make fiscal and monetary policy predictable and stable so that investment will flow.
Key to this is a serious commitment to spending reductions that have a clear goal, such as getting us to 2000 spending-to-GDP levels and balancing the budget without tax increases.
Why? Because investment will increase, and to know why that's good - all you have to do is look at the chart.
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