University of Massachusetts economist Richard Wolff on Tuesday explained that obsession over the federal deficit was based in politics, not economics.
Wolff said on the David Pakman Show that the government could not improve a struggling economy by cutting its spending. As the single biggest consumer, the government only reduced demand for goods and services by cutting spending, leading to greater unemployment.
However, conservatives and others who support austerity economics believe that reducing the deficit encourages others to buy goods and services. Wolff noted there was "very little empirical evidence" to support the claim.
"The minute Republicans are out of office, George Bush and Cheney gone, Obama coming in to replace them, then the Republicans turn around and find the deficit -- as they have many times -- a useful hammer with which to beat up on the incumbent in the hopes of replacing him," Wolff added.
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