Larry Says Government to Spend Trillions Wisely

Summers outlines Obama’s stimulus plan in very broad strokes. One gobbit caught my eye: 

Some argue that instead of attempting to both create jobs and invest in our long-run growth, we should focus exclusively on short-term policies that generate consumer spending. But that approach led to some of the challenges we face today — and it is that approach that we must reject if we are going to strengthen our middle class and our economy over the long run.

If by short-term policies, he means lowering interest rates to an all time low and stoking inflation, then that’s one thing.  Strangely, part of the set of policies that created this mess may also help to solve it, as some have argued. But what I think Larry is really saying, is that the Obama spending spree will work because the government will spend your money more wisely than you will. Larry emphasizes transparency, but he’s not being honest. He should just come out and say people are stupid and tend to spend their money foolishly. Remember the statist boner for Keynesian multipliers is really a post hoc rationalization for the moral judgement that you’re stupid.

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