Tyler Cowen suggests 5 arguments you won’t hear often when discussing the question of further fiscal stimulus. I was struck by #4:
4. Rather than just arguing about the most likely scenario, we should apply the same worst case scenario thinking that is recommended for climate change.
He implies that that wasn’t the argument Obama used. I recall it differently. I recall Obama saying words to the effect of debt is bad, but a depression is worse – let’s spend trillions!
And of course, he was pitching a worst case that would appeal to regular folk, but the real worst case he was hoping to avoid was economic collapse happening in his potential 8 years in office. He wanted to kick the can down the road a decade at least.
I favor fiscal stimulus but in a smart way. I favor moves that reward, in the long term, investment and smart risk taking. Lower taxes. Less government spending. Less regulations. The government might take in less money, but the economy would grow rapidly. And isn’t that the goal? Oh… it isn’t?
The fundamental problem the economy has is that those largely in control of it view it as something to plunder not nurture.