What is the impact on the economy of government spending less?

Simply stated, most government spending has a negative economic impact. To be sure, if government spends money in a productive way that generates a sufficiently high rate of return, the economy will benefit, but this is the exception rather than the rule. read more

In general, spending that goes directly to individuals (such as government benefits like Social Security or food stamps) has the highest multipliers, while 'tax expenditures', in other words tax cuts or deductions, have the lowest (nearly all of the potential expenditures with a multiplier less than 1.0, that actually reduce economic activity rather than increase it, are tax reductions). read more