The impact of fiscal stimulus packages is very limited in the short-run and positively damaging in the long-run. That was the argument put by Professor Robert Barro at the IEA's twentieth Annual Hayek Memorial Lecture on Tuesday night.
Barro's argument is that there should be greater emphasis on reducing marginal tax rates. This, he claims, was a key contributor to the impressive economic growth figures achieved under both Reagan and Clinton.
Here in the UK, Barro's analysis has immediate implications for the policy of the coalition government. There's not much point, as a worker in Britain, trying to get a salary increase from £100,000 to £120,000. You'd lose nearly two thirds of it in tax. Those earning around the £100K mark may not be high on the list of human beings you're most concerned about, but to place such an anti-aspirational block in the way of the successful becoming yet more so seems to be guided by envy rather than common sense.
Read the rest of the article on the HuffingtonPost UK site.