A Quote by James Callaghan

We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists, and in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of inflation into the economy, followed by a higher level of unemployment as the next step.

James Callaghan

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Bigger Candour Could Cutting Did Dose Each Economy Employment Ever Exist Exists Far Followed Government Government Spending Higher Higher Level Increase Inflation Level Longer Next Next Step Occasion Only Option Out Recession Since Spend Spending Step Taxes Tell Think Unemployment Used War Way Worked Your

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James Callaghan
English - Leader
March 27, 1912 - March 26, 2005

Only the federal government has the power to spend beyond its current revenue. It shouldn't do that when the economy is at full employment. But it's an essential step for an economy mired in recession.

Robert H. Frank

Here's why I think the public service jobs are almost unavoidable: When we have downturns in the economy - and we will, for we haven't repealed the business cycle - unemployment will build, yet we no longer have any safety net. What are we going to do? Unless we decide to pull out all the stops and lower interest rates immediately and risk turning a recession into wild inflation, we're going to have to figure out some way of providing some more, not job security, but employment security.

Robert Reich

In the middle of a recession, where we're just climbing out of it, where the economy -unemployment is still at 9.7 percent, the idea of raising taxes and reducing spending is a prescription for disaster.

Joe Biden

People think of a business cycle, which is a boom followed by a recession and then automatic stabilizers revive the economy. But this time we can't revive. The reason is that every recovery since 1945 has begun with a higher, and higher level of debt. The debt is so high now, that since 2008 we've been in what I call, debt deflation.

Michael Hudson

With a congressional mandate to run the deficit up as high as need be, there is no reason to raise taxes now and risk aggravating the depression. Instead, Obama will follow the opposite of the Reagan strategy. Reagan cut taxes and increased the deficit so that liberals could not increase spending. Obama will raise spending and increase the deficit so that conservatives cannot cut taxes. And, when the economy is restored, he will raise taxes with impunity, since the only people who will have to pay them would be rich Republicans.

Dick Morris

Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.

Martin Feldstein

Because tax cuts create an incentive to increase output, employment, and production, they also help balance the budget by reducing means-tested government expenditures. A faster-growing economy means lower unemployment and higher incomes, resulting in reduced unemployment benefits and other social welfare programs.

Arthur Laffer

I would cap the amount of federal government can spend at 20 percent of the economy. Bring it back to 20 percent or lower. And say, we are not going to spend above that level. Democrats, they want to raise your taxes and spend more and more and turn us into an economy which is no longer driven by the private sector.

Mitt Romney

If you increase taxes now on - at any level, it's going to make it harder to create jobs And we've lost 2 1/2 million jobs since the stimulus package passed. We're at 9.6 unemployment. So I don't think we tax too little, I think we spend too much.

Lindsey Graham

No politician can praise unemployment or inflation, and there is no way of combining high employment with stable prices that does not involve some control of income and prices. Otherwise the struggle for more consumption and more income to sustain it-a struggle that modern corporations, modern unions and modern democracy all facilitate and encourage-will drive up prices. Only heavy unemployment will then temper this upward thrust. Not many wish to confront the truth that the modern economy gives a choice only between inflation, unemployment, or controls.

John Kenneth Galbraith

This recession is the deepest in our lifetimes, the deepest since 1929. If you take the people thrown out of work in the 1982 recession, the 1991 recession, the 2001 recession, not only is this bigger, this is bigger than all of those combined.

Austan Goolsbee

If there's unemployment, having the government help reduce that unemployment, increase employment directly is a pretty good idea. It's not driving out competition; it's not crowding out.

Jeremy Grantham

It was an absurd theory that by cutting taxes you would increase government revenues, because the growth of the economy would create an overflow of taxes that would fall into the government coffers.

Sidney Blumenthal

The basic idea that if you increase government spending or you cut people's taxes that stimulates the economy and lowers the unemployment rate, is a very widely accepted idea. It's in every economics textbook, that's what we teach our undergraduates, and I certainly try to teach them the truth.

Christina Romer

If I were a candidate for running, I'd say, "Look at what the economy has done." It's strong. We've created a lot of jobs. I'd be telling people that the Democrats will raise your taxes. I'd be reminding people that tax cuts have worked in terms of stimulating the economy. I'd be reminding people there's a philosophical difference between those who want to raise taxes and have the government spend the money, and those of us who say, "You get to spend the money the way you want to see fit. It's your money."

George W. Bush

I argue that in the long run, the US would be on a far more financially secure footing if we recalibrate how we spend about two-to-three percent of the country's GNP, using state and federal taxes to create pools of money for spending on America's poor - which would, as numerous economists have argued in recent years, create virtuous spending circles, since those on lower incomes spend more of each extra dollar in their possession than do those on higher incomes.

Sasha Abramsky

A Quote by James Callaghan

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