Crowds Quote by Martin Feldstein
“Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.”
About This Quote
Source Speech: Economic Policy Lecture, 1995
Government spending can boost demand short‑term but may hinder growth long‑term by displacing private investment or raising taxes.
In simple terms: Short‑term boost, long‑term risk.
Key Takeaway
Balance spending with private sector health.
Themes
economics
public finance
growth
taxation
investment
Mood
cautious
analytical
concerned
Type
policy
economic
analytical
When to use this quote
- budget planning
- policy debate
- business strategy
- tax reform
- public investment
Key Concepts
crowding out
fiscal multiplier
incentive effects
Questions to Reflect On
- How can we ensure stimulus doesn’t crowd out innovation?
- What safeguards protect private investment?
A Different Perspective
If spending is too high, it may cause inflation or debt crises.
