Zachary Goldfarb provides statistical evidence to support his claim that the past several years have been an “age of austerity” in the United States.
Goldfarb: “You must consider the stance of fiscal policy relative to the environment we’re in.”
As a response to recovery from a devastating recession, “it makes sense that the government will do what it can to make up for a massive shortfall in demand.”
“Except, the government has been doing a lot less to stimulate the economy for each of the past few years.”
“Consider this chart based on data from Moody Analytics’ Mark Zandi, which measures the change in the structural deficit as a percentage of GDP. The structural deficit measures whether government policy alone is adding or subtracting from economic growth. As you can see in the red, over the past few years, fiscal policy has been subtracting substantially from economic growth.”