Slower Growth in Q3

Slower Growth in Q3

October 25, 2021
Share |

Keynesianism can temporarily giveth, but ultimately always taketh away...and then some.

When the US fell into the COVID crisis, the federal government went on a massive spending binge.  Pre-COVID, in the twelve months through March 2020, federal outlays were $4.6 trillion, or 21.4% of GDP.  In the next twelve months outlays soared to $7.6 trillion, or 36.2% of GDP.  Outside of wartime, we know of no other time when the government has ramped up spending that much or that fast.  As a result, as well as very easy money, the economy partially bounced back faster than it would have in the absence of the extra spending.

Read more...