"The Federal Reserve, Congress and the president need to reaffirm that they will do whatever it takes to restore the economy to full health... They should follow up with powerful fiscal and monetary actions to create jobs — coupled with a concrete plan for tackling our long-run budget problems."
What exactly are these mysterious "powerful" policy actions and why didn't the government try them when Dr. Romer was head of the CEA?
Good grief!
4 comments:
Is she acknowledging that Ricardian Equivalence is true?
"The tax changes required to balance the budget in the future could be modest or enormous, depending on what happens to spending. Simply promising not to raise taxes wouldn’t be helpful. The American people are wise enough to understand that wishing won’t make the problem go away."
If so, wouldn't fiscal policy also be ineffective?
"The Federal Reserve, Congress and the president need to reaffirm that they will do whatever it takes to restore the economy to full health"
I'll bet in her mind, "whatever it takes" probably doesn't include the option of not doing things. Say for instance, all of the harmful federal policies that helped create and exacerbate the current situation.
When the patient keeps getting sicker, maybe stronger doses of the wrong medicine are not as good for the patient as a moratorium on bad care. Primum non nocere.
Go gridlock!
Go gridlock!
Indeed! We can all have a nice tax hike as a New Year's present, and then continue to basically let Wall Street run wild with the money we've already given them and without the regulations we took away from them. Sitting on our hands solves everything!
I'd agree about the gridlock exception for making the tax cuts permanent. Good point.
By the way, which regulations did "we" take away again?
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