Back on topic. Here is evidence that Romney's (and Obama's) plans for closing GDP gaps as a way to decrease the deficit won't work.
http://www.youtube.com/watch?v=vQu7V9pMK48&feature=player_embedded
Here's the Economic study that she cites out of Harvard:
http://www.nber.org/papers/w15438" onclick="window.open(this.href);return false;
Large Changes in Fiscal Policy: Taxes Versus Spending
Alberto F. Alesina, Silvia Ardagna
NBER Working Paper No. 15438
Issued in October 2009
NBER Program(s): POL
We examine the evidence on episodes of large stances in fiscal policy, both in cases of fiscal stimuli and in that of fiscal adjustments in OECD countries from 1970 to 2007. Fiscal stimuli based upon tax cuts are more likely to increase growth than those based upon spending increases. As for fiscal adjustments, those based upon spending cuts and no tax increases are more likely to reduce deficits and debt over GDP ratios than those based upon tax increases. In addition, adjustments on the spending side rather than on the tax side are less likely to create recessions. We confirm these results with simple regression analysis.
Published: Large Changes in Fiscal Policy: Taxes versus Spending, Alberto Alesina, Silvia Ardagna, in Tax Policy and the Economy, Volume 24 (2010), The University of Chicago Press
You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery."
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Here's Dr. Alesina's Report on this study prepared for a conference in Madrid:
http://www.economics.harvard.edu/app...ts_lessons.pdf" onclick="window.open(this.href);return false;
Do fiscal adjustments always cause recessions?
The answer to this question is a loud no. Starting from the early nineties, several authors have noted how large and decisive deficit reduction policies in several European countries were accompanied by increases in growth, the opposite of the standard Keynesian story."
More at link...
