Dear Chicago Trib: U.S. Should Be Shangri-la

Published: 1/5/2009 5:38 PM ET

Editor, Chicago Tribune

Dear Editor:

President-elect Obama prescribes fiscal stimulus as the cure for America's ailing economy ("Obama urges Congress to approve economic recovery plan quickly, support bold investment," Jan. 3). Well let's see.

With the exception of a few years during the Clinton administration, the U.S. has run annual budget deficits continuously for the past four decades. And from 2002 through 2008, Uncle Sam ran budget deficits each year, totaling $2.13 TRILLION dollars. That's a frightful amount of fiscal stimulus, and yet the economy today is struggling.

Now with the bailout, the budget deficit for 2009 alone is projected to be close to $1 trillion – nearly seven percent of GDP, a figure much higher than at anytime since WWII. If deficit spending were good for the economy, Americans would now be, not on shaky ground, but in Shangri-la.

Sincerely,

Donald J. Boudreaux

Don Boudreaux is the Chairman of the Department of Economics at George Mason University and a Business & Media Institute adviser.

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