Monday, July 19, 2010

earmarks reduce economc activity

From World, news/research from a Harvard Business School working paper-- that pork projects damage the economy.

Researchers analyzed data from a 40-year period and found that earmark spending increased dramatically for districts and states when their representatives or senators rose to chair one of the three major congressional committees. At the same time, local businesses suffered losses in sales growth and employment, and they cut back capital spending by about 15 percent. The researchers speculate that government projects supplant private activities, lure employees away from local firms, and create uncertainty for investment decisions. Researcher Josh Coval said the result was "an enormous surprise."

Even the much-vaunted shoter-term advantages of political spending and Keynesian stimulus is not all it's cracked up to be. When will the Democrats and Republicans quit monkeying with the economy and causing so much damage?


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