Why Government Spending Multipliers Are Smaller Than You Think

Lucas and Luna unpack the fiscal multiplier—the concept that every dollar the government spends should generate more than a dollar of economic activity. But recent data from the Congressional Budget Office and academic studies suggest multipliers are often below 1, meaning stimulus can actually shrink the economy over time. They look at the 2009 American Recovery and Reinvestment Act, the 2021 American Rescue Plan, and the post-COVID infrastructure spending to see why results vary: crowding out, Ricardian equivalence, and supply constraints. A sharp, numbers-driven look at why not all government spending is created equal. #FiscalMultiplier #GovernmentSpending #Stimulus #CBO #AmericanRecovery #AmericanRescuePlan #Infrastructure #RicardianEquivalence #CrowdingOut #SupplyConstraints #Economics #PublicFinance #GDP #FiscalPolicy #Podcast #FexingoBusiness #BusinessPodcast #EconomicGrowth Keep every episode free: buymeacoffee.com/fexingo