Du'O (Part 86,935)

clipped from hotair.com Don’t color Veronique de Rugy shocked, shocked to find that government spending crowds out private investment, but the results of the new study by Harvard Business School will certainly shock some Keynesian academics — and high-ranking government officials.  Instead of providing a stimulating effect to the economy, government spending creates pressures on private industry to reduce staff and investment.  The study’s authors count themselves as among the shocked: Recent research at Harvard Business School began with the premise that as a state’s congressional delegation grew in stature and power in Washington, D.C., local businesses would benefit from the increased federal spending sure to come their way. It turned out quite the opposite. In fact, professors Lauren Cohen, Joshua Coval, and Christopher Malloy discovered to their surprise that companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses.