Triggered by an appearance on Canadian TV, I asked yesterday why we should believe anti-sequester Keynesians. They want us to think that a very modest reduction in the growth of government spending will hurt the economy, yet Canada enjoyed rapid growth in the mid-1990s during a period of substantial budget restraint. I make a similar point in this debate with Robert Reich, noting that the burden of government spending was reduced as a share of economic output during the relatively prosperous Reagan years and Clinton years:
Being a magnanimous person, I even told Robert he should take credit for the Clinton years since he was labor secretary. Amazingly, he didn’t take me up on my offer.