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Spending Cuts May Be Answer to Slow Economic Growth

pascagoulapappy Wrote: Mar 07, 2013 2:56 PM
I'm reminded of a story recorded by Vance Randolph, the Arkansas folklorist. It seems that an old Ozark mountaineer went to the doctor with an embarrassing complaint.: "Doc, ever time I poot it stinks so bad I jus bout cain't stand it.' "Well, let one rip an we'll see." "P-p-p-poo-oo-oo-oottt!" "Gag! Barf! Bwaap ! Hoo-eee!" "Kin yeh do anythang fer me Doc?" "Well, I'll give you a diet. Twice a day take a pound of limburger cheese, a can of sauerkraut, a half a dozen hard-boiled eggs, two cans of sardines, four cloves of garlic, and a quart of beer." "That might cure me?" "Naw. It ain't a gonna cure you---but it shore might help some !" The sequester might not cure overspending, or the flatulent odor thereof.

The Dow set a new high on Tuesday, but the larger economy is a different story. What if today's sluggish economic growth turns out to be the new normal? That's the unsettling question asked by some of our most creative economic thinkers.

And the people asking it are not necessarily partisan opponents of the Obama administration. They argue that economic growth rates were disappointing even before the financial collapse and recession of 2007-09.

Take Tyler Cowen, author of the e-book (belatedly published in print) "The Great Stagnation." Economic growth is the product of increases in the labor supply and productivity,...