Summary: The US economy continues to slow, albeit the rate of decay has slowed. But the net damage is severe and a recovery soon is imperative — or more “black swans” will appear. This is the third in a series of posts about the effects of basic automatic stabilizers on the economy during this recession. Why has the …
Economists discuss the impact of the stimulus on our recession Read More »
Government stimulus requires borrowing money. So it can do more harm than good unless spent carefully, focused on two goals: Mitigate the suffering caused by the downturn (e.g., Medicaid, unemployment insurnance, food stamps). Investment in infrastructure projects that generate tangible future returns. Classic examples are transportation, utilities (water purification, sewage treatment), telecommunications. (For more about this see …
Cash for Clunkers is madness! Let’s expand it to new horizons! Read More »
Summary: Team Obama has chosen the soft path to economic recovery. Spend money while stalling any substantial reforms. No confronting our deep structural reforms, just wait for the recovery due later this year. It might work — reliable forecasts are difficult or impossible these days — but its failure would leave us far weaker, making …
Napoleon’s advice to President Obama about the financial crisis Read More »
Summary: This post gives a brief description of government stimulus programs, based on theory and past experience. Although there is a strong and broad consensus among economists on these things, it is not unanimous. And there is debate on about many aspects — esp how to balance short-term needs and long-term costs. This is a follow-up to A situation report about the …
Summary: The financial crisis began in December 2006. The recession probably started in early 2008. The economy went into cardiac arrest last week. This is the fourth in a series of posts discussing what needs to be done. For those of you who do not watch TV, “stat” is a medical term from the Latin …
