Article Analysis: Does Spending Stimulate

Robert L. Bartley (2002) discussed the economic recovery which began to emerge at the outset of 2002, arguing that the recovery did not appear dependent on any help from fiscal policy. Bartley (2002) suggested that Congressional interest in a so-called "stimulus bill" which would simultaneously increase government spending and increase the government deficit, was largely unnecessary. While he recognized that the vigor of the emergent economic recovery was still in doubt, and that stimulus spending therefore would be appropriate, he questioned the validity of increasing the government deficit. This report will examine the macroeconomic implications of the commentary offered by Bartley (2002).

Bartley's (2002) position is identified when he made reference to the new view of government stimulus spending as articulated by former president Ronald Reagan. Reagan is described as countering stagflation with ta

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