Greg Mankiw has a well reasoned post that ranges into several issues – ending with one of my favorites:
I should note that purported free lunches are found on both sides of the political divide. Politicians on the right like to claim that their proposed tax cuts will completely pay for themselves with extra economic growth. Politicians on the left like to claim that their proposed spending programs are investments that will yield returns so great that the spending becomes self-financing. Either outcome is possible in theory, but skepticism is usually the best response in practice.
Since I have been hammering our governor as running free lunch fiscal policy, let me suggest that ARNOLD is a great examples of being “on both sides of the political divide”. After all, he is an FDR liberal who wants to invest more in California roads and schools AND he’s a Reagan conservative who wants to keep our taxes low. So why is the press praising him for being a new kind of political leader? Greg Mankiw has been criticizing this kind of free lunch fiscal nonsense ever since his first macroeconomic textbook – even if it meant criticizing a former Republican President also known as St. Reagan.
Speaking of which, Jerry Bowyer reminds us that President Reagan listened all too much to Arthur Laffer, but then Bowyer thinks the king of free lunch clowns “conquered his foes and liberated untold people”.