CATO and 200 professors fight rear guard action against the stimulus package.

On January 9, 2009, Obama said, "There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy." 

A full page CATO Institute ad in the front section of today's NYTimes says in the biggest type size on the page, "With all due respect Mr. President, that is not true."  Below that, 200+ economics professors sign a statement saying they "do not believe that more government spending is a way to improve economic performance," but that "lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth." 

It's odd that they would deny the President's statement that government action is needed, because tax cuts, which they favor, would require government action.  But when they say increased government spending is not even "a" way to improve economic performance--in other words, it won't work at all--they adopt a truly outer fringe position.  Most economists who think tax cuts ordinarily work better than increased government spending, or at least are philosophically preferable to government spending, don't deny that government spending is stimulative when there is high unemployment.  Lots of careers on the line here, but these are desperate times in academia.  Pickett's Charge and The Light Brigade come to mind.

Update on Sunday, February 1, 2009 at 10:49AM by Skeptic

Newly elected Republican National Committee chairman Mike Steele also embraces the objectively false and indefensible: “You and I know that in the history of mankind and womankind, government—federal, state or local—has never created one job,” he said. “It’s destroyed a lot of them.”  How does this stuff help the Republican Party recover?