Crafting More Effective Stimulus Legislation, Part 5: What can we do to encourage a recovery?

Tuesday, August 14, 2012

The nerve of me. I’m nobody, and yet here I am telling you that monetary and fiscal policies, the traditional versions of them, don’t work. I might as well be telling you that prayer may make you feel like you’re doing something, but it doesn’t really accomplish anything, that any sense that it does is just wishful thinking and, in any case, impossible to prove. It is, of course, a flawed analogy, used only to make a point. The difference is that prayer is a matter of belief, while the efficacy of monetary and fiscal policy is science, social science, but science nonetheless. We don’t want elected officials who believe in the power of government. We want a President and legislators who understand the science of using government resources for the common good.

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Crafting More Effective Stimulus Legislation, Part 4: What’s wrong with tax-related fiscal policies?

Sunday, August 13, 2012

Hi. You don’t dare start “Part 4” of anything without a summary. Like they say at the beginning of new episodes when the show’s storyline is complicated, “Previously on Next Contestant, …”

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Crafting More Effective Stimulus Legislation, Part 3: Why don’t President Obama’s fiscal policies work?

Saturday, August 11, 2012

Fiscal policy is the use of government spending and taxation to influence the economy. Increases in government spending can create jobs that are needed to produce the goods and services the government buys, and then some through what are called “multiplier effects.” Reducing tax rates, to businesses and people, gives them more disposable income to spend. The more goods and services they buy, the more people that will be needed to make those things. That’s it in a nutshell.

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