Is All Government Spending ‘Stimulus’?
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Paul Solman frequently answers questions from the NewsHour audience on business and economic news on his Making Sen$e page. Here is Friday’s query:
William Carr: I discovered your page following a reference from the show. You’re just the man I’ve been looking for. Question: If the stimulus program of 2009 was included in the federal budget and the budget was not subsequently reduced, did we in effect get an equivalent stimulus program, or more, in 2010 and 2011?
Paul Solman: I am happy to be your man, if only for the duration of answering your question.
If you count all federal spending as “stimulus,” then by definition the answer is yes, assuming that when you write a “budget not subsequently reduced,” you’re taking inflation into account. “Real” — which is to say, inflation-adjusted — spending is the only real way to compare one year’s numbers to another’s.
But if you mean something a tad more nuanced — or should I say more accurate — then no, absolutely not. Are you suggesting that were we to spend more on defense, in real dollars, that should count as “stimulus”? A rise in the number of retirees hitting Medicare? What about built-in raises to federal employees? What about a rise in interest payments on our federal debt as we borrow more money to balance our budget? We could, in short, wind up spending a lot more money without it being in any way categorizable as “stimulus” spending.