Must-Read: Paul Krugman: Will Fiscal Policy Really Be Expansionary?

Must Read: In fact, it is looking less and less likely that the Trump deficits will be the kind of fiscal stimulus reality-based economists interested in economic recovery have been pleading for ever since the financial crisis:

Paul Krugman: Will Fiscal Policy Really Be Expansionary: “It’s now generally accepted that Trumpism will finally involve the kind of fiscal stimulus progressive economists have been pleading for…

…Republicans are deeply worried about budget deficits when a Democrat is in the White House, but suddenly become fiscal doves when in control. And there really is no question that the deficit will go up. But will this actually amount to fiscal stimulus?… Given the extent to which things are in flux, I can’t put numbers on what’s likely to happen. But I was able to find matching analyses by the good folks at CBPP of tax and spending cuts in Paul Ryan’s 2014 budget, which may be a useful model of things to come. If you leave out the magic asterisks… that budget was a deficit-hiker: $5.7 trillion in tax cuts over 10 years, versus $5 trillion in spending cuts. The spending cuts involved cuts in discretionary spending plus huge cuts in programs that serve the poor and middle class; the tax cuts were, of course, very targeted on high incomes…. That old Ryan plan would almost surely have been contractionary, not expansionary.

Will Trumponomics be any different? It would matter if there really were a large infrastructure push, but that’s becoming ever less plausible….