>And what's stupid about government reducing income and borrowing in a downturn?
Government finances are not like your household's, reducing spending is exactly the opposite thing the government should do in a recession.
Government finances are not like your household's, reducing spending is exactly the opposite thing the government should do in a recession.
Spending is the appropriate response when faced with a demand driven recession. This is a supply driven recession and reducing govt demand may not be a bad idea.
Reducing revenue is also one of those things that conventional wisdom says a government "should do" during a recession, so I'm asking why it was stupid.