The libertarian Cato Institute has been sponsoring an advertisement saying that “it is a triumph of hope over experience to believe that more government spending will help the U.S.” fix the economy. Among the hundreds of signers were professors from several Christian colleges, including: John Lunn from Hope College, Earl Grinols from Baylor University, Seth Norton of Wheaton College, Alex Tokarev from The King’s College and a World magazine correspondent, and Douglas Walker of Regent University.
While the President has promised to restore science to it’s rightful place (for some a jab at the evangelical influence on the previous administration), many economists are wondering whether science or faith is driving the economic theory behind the stimulus bill. As The Atlantic‘s Megan McArdle points out, “The evidence for this kind of stimulus working in this kind of situation basically rests on a single instance (World War II)–the other two times it was tried (Japan in the 1990s and America in the 1930s) the economy basically rolled along in the doldrums for the rest of the decade.” The burden of proof she says is on supporters of the stimulus, otherwise, “We might as well move macroeconomic policy to the Office of Faith-Based Initiatives.”
Update: Justin Fox, of Time magazine’s Curious Capitalist blog, argues that the stimulus bill is an economist’s version of Pascal’s wager–”Let us estimate these two chances. If you gain, you gain all; if you lose, you lose nothing.” If the stimulus works, great. If not, we’re only out $800 billion.
