Uncle Sam: From Riches to Poorhouse

As commentators too numerous to mention have pointed out, the spending "freeze" that President Obama will announce tonight is largely a political move. From an economic perspective, an austerity measure that applies to less than twenty per cent of the federal budget, as this one does, is too small to have much macroeconomic impact, although the cuts to individual programs will be real enough.

The debate about the need for short-term stimulus versus long-term deficit reduction is an important o...