There are three kinds of spending: voluntary, transfer, and involuntary. Except for the environs of usage fees, government doesn’t participate too much in the first kind. On the other hand, transfers such as Social Security and unemployment insurance are significant and may have some stimulative benefits if in fact reducing investment is stimulative.

Everything else the government does is involuntary spending — spending that someone didn’t choose to do with his own money and therefore something that person valued less than it cost. One can fairly argue that some involuntary spending is on authentic public goods that the taxpayer really should have wanted to spend money on, such as actual defense or needed infrastructure improvements. The trouble is that such spending is (a) small potatoes and (b) unchanged by recessions.

So Keynesian stimulus can really only increase spending on things that actively subtract from the economy. Every dollar of stimulus actually makes us poorer because it makes the population pay for something we did not want. A case could be made that the need to keep velocity in money so the recession does not become a depression is so important that it is worth burning 10% or 50% or more than 100% of every dollar spent. But it’s a hard case to make. And you are still left with stimulus not correlating too well with actually increased income.

They do not stop making carbon paper write away.

Heh.