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Spending Cuts May Be Answer to Slow Economic Growth

RHSimard Wrote: Mar 07, 2013 8:39 PM
Innovation spurs productivity growth, sure, but before that can happen, you need capital, and right now those with the means to capitalize productive enterprise are holding back, thanks to a business-hostile and volatile economic atmosphere that makes risking investment funds too risky to be prudent.

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,...