Stimulate What?

The Man(kiw) has done it again. He went on CNBC's Squawkbox to talk about different ways to stimulate the economy.

Bottom Line: Tax cuts seem to have a larger multiplier effect than direct government spending. Though spending is a good way to stimulate the economy, it should have to pass a cost benefit analysis, indicating that the spending project is worthwhile. Tax cuts, however, already pass the cost benefit analysis*. Though I am not a macro-economist, I tend to agree with the Professor.

Also, on a side note, the US Representative who appears with Mankiw seems to know his stuff pretty well. For the 3 or so minutes he was speaking, I was partially convinced that he was not a moron.

Watch the video here

* That one is for you, Scott, and all the other libertarians out there.