Will Biden’s Covid Mandates Be an Economic Multiplier?

Will Biden’s Covid Mandates Be an Economic Multiplier?

White House Chief of Staff Ronald Klain tweeted on Wednesday: “Stronger COVID measures produce STRONGER ECONOMIC outcomes.  That’s why jobs, growth, and economic activity are UP this year, significantly over last year.”

Actually, jobs and economic activity have rebounded because governors are no longer locking down businesses, schools, and daily life. But Biden’s team is painting its latest Covid decrees as the key to renewed prosperity.

Biden’s team is tacitly invoking a long history of multipliers to justify government interventions. In the 1930s, John Maynard Keynes popularized the notion of economic multipliers, touting the Egyptian pyramids as a model for government creation of prosperity. (Keynes omitted citing any surveys of the slaves who built the pyramids.) Henry Hazlitt, one of Keynes’ most astute critics, noted that for Keynes, multipliers “really mean any addition to [government] spending for…

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