trolls

To Matt Young:

"A multiplier is dY/d(G-T). (Note that part of Y is also G-T, so a multiplier > 1 => a positive secondary impact of the deficit. And a secondary impact means both that T will increase - offsetting the original stimulus, and that non-government GDP will grow reducing - not increasing the relative size of the government sector.)

But Y is not JUST a function of G-T, there are other potential sources of growth, so I really don't understand what you are talking about.

(Besides which nobody thinks the multiplier is really a long term effect - there is a capacity ceiling that means at full employment there is 100% crowding out)."