Too Much Government Spending? I don’t think so!

By Paul Krugman

Here’s a chart. It shows changes since the second quarter, which was both the bottom of the recession and the earliest point at which you can plausible say that Obama had any influence on actual policy. I show nonresidential fixed investment — basically business investment — and government purchases of goods and services:

Business investment has actually gone up a lot; maybe you think it should have gone up even more, but it’s not the heart of the problem. On the other hand, we’ve had a lot of cutbacks in government — mainly at the state and local level, but federal aid could have avoided that.

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