I Hate To Pile On To Brian Riedl, But He Deserves It
There's much in Brian's piece that requires criticism, but here's the graph that is the most offensive:
The idea that government spending creates jobs makes sense only if you never ask where the government got the money. It didn’t fall from the sky. The only way Congress can inject spending into the economy is by first taxing or borrowing it out of the economy. No new demand is created; it’s a zero-sum transfer of existing demand.
Brian...The goal of economic stimulus is to create activity that wouldn't otherwise occur at that time. Your statement would have been correct if the economy had been operating at close to full employment and capacity. But it wasn't. Businesses weren't spending, consumers weren't spending, and monetary policy adjustments were not doing much to change that behavior.
So the federal government used borrowed funds (Nice try, Brian, but there were no tax increases), that is, it got funds from those who were not spending the money and then spent it or gave it to others with a tax cut (about 40 percent of the stimulus was tax cuts) to create that activity. Unless there are no limits on productivity improvement, that has to result in more jobs than would have otherwise existed.