May 21, 2012

Veronique de Rugy Debates How to Fix the Economy on Voice of America

Veronique de Rugy

George Gibbs Chair in Political Economy

Veronique de Rugy says Japan’s experience shows that government spending increases costs but not growth. "They have, for years and years and years, tried to get out of their recession, or their slow or non-growth, through spending and spending and spending and being in debt and that has not worked," de Rugy said. During recessions, many governments spend money on public infrastructure to create jobs and spur long term growth. But de Rugy says, if government spending boosts demand and growth during recessions, it should not be needed when the economy is strong. "In times of boom or economic growth, government should be cut. The size of government, government spending, should go down.  And that never happens," de Rugy said.