In the event, spending by government  and low er taxes  generate an increase in demand, including consumption, providing an incentive for businesses to invest and increase operations to meet the higher demand; thus making positive contribution to economic grow th.
In this regard, the ongoing decline in risk spreads in corporate bond markets so far this year is an encouraging development. To be sure, spreads remain high by historical standards, but the constraint imposed by last fall's huge run-up in risk premiums now appears to have been put largely behind us.