I’ve always believed (and seen demonstrated in reality) that ‘you have to spend money to make money’, the right-wing theory that to prosper you have to spend less made no sense. Education and infrastructure, two core components of successful societies, cost money and if they’re to be for the good of all, instead of a few rich investors, the money has to come from tax revenue.
The theory made no sense to others either, including Thomas Herndon, University of Massachusetts economics grad student who discovered major flaws in the ‘research’, really basic statistical flaws added to incompetence in coding an Excel spreadsheet.
From Mark Karlin (of BuzzFlash writing at Truthout) quoting Paul Krugman:
But just look at the predictions the two sides in this debate have made. People like me predicted right from the start that large budget deficits would have little effect on interest rates, that large-scale “money printing” by the Fed (not a good description of actual Fed policy, but never mind) wouldn’t be inflationary, that austerity policies would lead to terrible economic downturns. The other side jeered, insisting that interest rates would skyrocket and that austerity would actually lead to economic expansion. Ask bond traders, or the suffering populations of Spain, Portugal and so on, how it actually turned out.
Read more at Truthout