Senator Saxby Chambliss of Georgia has apparently decided that fiscal contraction in the face of a recession is a good idea:
Congress should do its job by working to balance the federal budget deficit, Chambliss said.
“I ran in ‘94 on a balanced budget,” he said. “We did what we said we’d do. You’ve got to have a Congress that exercises fiscal discipline.”
Amidst the “automatic stabilizers” that kick in during a recession (i.e., declining tax revenue and increased demands on public assistance programs) the only way to achieve this would be through a massive combination of tax hikes and spending cuts that would threaten to push the world on a downward spiral toward a new depression. Even the professional deficit-worriers at the Committee for a Responsible Federal Budget are rejecting Chambliss-style neo-Hooverism and embracing the need for Keynsian stimulus at a time when the Federal Reserve has little ability to juice growth through monetary policy.
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