Politics & Power Quote by Martin Feldstein

Feldstein is doing something more strategic than repeating a small-government slogan: he’s laying down a time horizon trap. In the short run, he concedes, fiscal spending can “stimulus” demand and output. That concession is rhetorical judo. It disarms Keynesian critics by granting their best point, then pivots to the real claim: democracies are addicted to the short run, and macro policy is judged on the next quarter, not the next decade.

The key phrase is “temporary stimulus.” It’s a temporal demotion that reframes spending as painkiller, not cure. Then comes the governing subtext: every dollar the state spends must be financed, and the financing mechanism is where growth goes to die. “Crowd out private investment” invokes capital markets and interest rates, but it also smuggles in a cultural hierarchy: private investment is productive and future-oriented; government spending is, at best, a stopgap and, at worst, a competitor for scarce resources.

His second pathway, “require higher taxes,” is the moral and behavioral argument. Feldstein’s list - save, invest, innovate, work - reads like a catechism of capitalist virtue. The implied villain isn’t merely higher tax rates; it’s dulled incentives, a society that quietly learns effort is less rewarded. That’s why the quote works: it fuses technical macroeconomics with a story about human motivation.

Context matters. Feldstein, a Harvard economist and Reagan-era adviser, spoke from the post-1970s skepticism toward big fiscal promises, when inflation, deficits, and slow growth made “stimulus” sound less like compassion than like denial. The line is less a neutral model than a warning about political economy: stimulus is easy to start, hard to unwind, and often justified with benefits that arrive quickly while costs compound offstage.