In a very weak economy, when you say 'cut government spending,' what you mean is you're laying off school teachers and you're de-funding various programs that put money into the economy. This means you have more unemployed people that then draw unemployment benefits and don't pay taxes.
Interpretation
Cutting government spending in a weak economy leads to higher unemployment and less overall economic support.
Fareed Zakaria highlights the paradox of cutting government spending during economic downturns. While such cuts are often seen as an attempt to balance budgets, they can result in greater unemployment and a contraction of economic activity, as essential services are removed and those affected by layoffs become reliant on unemployment benefits, thus exacerbating the very financial challenges the cuts intended to address.
In practice
This quote can be used in discussions about fiscal policy at a public forum.
But now, we are becoming suspicious of the very things we have long celebrated - free markets, trade, immigration, and technological change. And all this is happening when the tide is going our way. Just as the world is opening up, America is closing down.
It is likely that human beings will find fulfillment and will be rewarded for the same qualities that they have been rewarded for for 5,000 years. And that is intelligence, hard work, honesty, a sense of character, loyalty to family and friends, and above all, love and faith. If you are trying to decide what you should do, those are the things you should do. And you know it.
The Berlin Wall wasn't the only barrier to fall after the collapse of the Soviet Union and the end of the Cold War. Traditional barriers to the flow of money, trade, people and ideas also fell.
If you listen to the political discourse in America today, you would think that all our problems have been caused by the Mexicans of the Chinese or the Muslims. The reality is that we have caused our own problems. Whatever has happened has been caused by isolating ourselves or blaming others.
In the 1990s, we were certain that Saddam Hussein had a nuclear arsenal. In fact, his factories could barely make soap.
But as the arms-control scholar Thomas Schelling once noted, two things are very expensive in international life: promises when they succeed and threats when they fail.
If the job of capitalism is to create wealth for those who put up the capital, no fund group comes close to Vanguard's success in serving its owners. So we're probably as far away from communism as is realistically possible.
We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.
Inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary. For this reason all those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy.
War can really cause no economic boom, at least not directly, since an increase in wealth never does result from destruction of goods.
Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once unthinkable dosages will almost certainly bring on unwelcome after-effects. Their precise nature is anyone's guess, though one likely consequence is an onslaught of inflation.
Building new roads and bridges creates jobs. Growing our exports creates jobs. Reforming our outdated tax system and our broken immigration system creates jobs.
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