Economic Stimulus: Issues and Policies
"...Fiscal policy temporarily stimulates the economy through an increase in spending which also, if not offset by increases in revenue, increases the budget deficit. There is a consensus that certain proposals, ones that result in more spending, can be implemented quickly, and leave no long-term effect on the budget deficit, would increase the benefits and reduce the costs of fiscal stimulus relative to other proposals. Economists generally agree that spending proposals are somewhat
more stimulative than tax cuts since part of a tax cut may be saved by the recipients. The most important determinant of the effect on the economy is the stimulus’ size. The recent stimulus package increased the deficit by about 1% of GDP."