Frustrating because in a demand-caused recession those two goals are in tension. We could choose a truly massive stimulus policy, and that would lead to lots of job growth, getting us out of the doldrums much faster (this is what Krugman and other liberals wanted)- but this would involve increased deficits. Or we could choose to close the deficit faster, cut spending severely, and head toward a balanced budget (as conservatives want, or as the Bowles-Simpson plan recommends), but that would almost certainly curtail job growth.
Yes, that's Keynesian theory at work. Obama has settled on a middle course, pushing less stimulus than some wanted, and then pivoting to deficit reduction to placate conservatives. Obviously, this didn't placate conservatives, but that's what he wanted to do.
But this middle course of mild stimulus has performed the way Keynesians expected- there has been no double dip, as is happening in much of Europe where there was little or no stimulus.
I know, I know..... conservatives now deny that Keynes was right about anything. I guess when they're out of office they forget all about their past support of stimulus. Sigh....
If Americans under the age of 18 were required as a group to pay off the entirety of the federal government’s debt in equal shares, each would now need to pay about $218,676.00.
ReplyDeleteHave you Foundry followers told your children about the debt they now have? Have you told them that your hero President Obama is responsible for about 1/3 of it? Have you told them not to worry about it,,when they get a job their taxes will be much higher than yours? Have you told them their Debt is probably going to increase if the guy you voted for wins? You owe your children the truth.