This statement implies that expansionary fiscal policy will result in crowding out of the private sector, and that the opposite, contractionary fiscal policy, will lead the private sector to grow. Whether this statement is true or not depends upon whether the economy is at full employment; it is only then that we should expect expansionary fiscal policy to lead to crowding out. If, instead, the economy has a recessionary gap, then we should expect instead that the private sector grows along with the fiscal expansion, and contracts along with a fiscal contraction.