Germany and Britain have taken great measures over the last months to shore up spending and devise plans to actively decrease future deficits. The great debate in this country right now is whether we need to be more like our European counterparts to fix our ailing economy or whether we need to push for more government stimulus – ratcheting up our deficits to even higher levels for years to come. Spend, spend, spend is NOT the way to go, says Brian Wesbury, Chief Economist at First Trust Portfolios. He believes that more government spending would actually “de-stimulate” the economy and interfere with economic growth. Money for stimulus programs has to come from somewhere and he argues that stimulus spending is similar to the old adage: “borrowing from Peter to Paul.”
“They (the government) either had to tax it from somewhere or borrow it from somewhere," says Wesbury and “by moving resources out of one sector into another you have now messed up the natural order of things and you’ve influenced it in a negative way."
Wesbury says THAT is the mistaken belief about government stimulus.
In the following clip, Wesbury tells Aaron and Henry that the government is not needed right now to create growth and that Americans can do it alone. He goes on to say that, “The government has overstepped its bounds. It is too big. And it is hurting the economy.”
