An interesting article reads in part, “The horrors of monetary policy aside, fiscal policy cannot stimulate the economy. As we know, the government has no money of its own. It has only the power to tax and spend the money of others. There can only be a transfer that takes place, not a creation of wealth: jobs in X are gained, but jobs in Y are lost.”

          Stimulus comes from taxing businesses that in a real economy are the ones who stimulate the economy. Government debt results in higher taxes, either by inflation, or future taxes.

          Liberals will say that government spending increases GDP and that is a good thing, but the question is what is the long term economic effect? Taken to the extreme, “a fiscal policy taking up 95% of GDP would make people better off than a fiscal policy taking up 5% of GDP. Clearly, this is not the case.”