DeLong Says Not Time to Cut U.S. Budget With Free Lunch

Just as lawmakers force as much as $85 billion of budget cuts on the federal government, economists Bradford DeLong and Lawrence Summers have a message for Washington: Now is the perfect time to spend more, not less.

Their advice is based on new research suggesting that, because of today’s rare economic circumstances, increased spending could be unusually potent in reviving growth. A study by former Treasury Secretary Summers and DeLong, a University of California at Berkeley economist, concluded stimulus now could generate so much growth that it would pay for itself.