Real-economy arguments for more public borrowing:
- The economy generally operates below potential
- There are long run forces pushing down demand
- Potential output is mismeasured; we are still well below it
- Recessions and jobless recoveries have occurred repeatedly in past, will occur again in the future
- Monetary policy is not effective at maintaining full employment
- It’s hard to ramp up public spending quickly in recession
- The costs of getting demand wrong are not symmetrical
- Weak demand may have permanent effects on potential output
Financial arguments for more public borrowing:
- With low interest rates, debt does not snowball
- There is good reason to think interest rates will remain low
- With hysteresis, higher public borrowing can pay for itself
- Federal debt is an important asset for financial markets
- Federal debt is an important asset for the rest of the world
No comments:
Post a Comment
Please pick a handle or moniker for your comment. It's much easier to address someone by a name or pseudonym than simply "hey you". I have the option of requiring a "hard" identity, but I don't want to turn that on... yet.
With few exceptions, I will not respond or reply to anonymous comments, and I may delete them. I keep a copy of all comments; if you want the text of your comment to repost with something vaguely resembling an identity, email me.
No spam, pr0n, commercial advertising, insanity, lies, repetition or off-topic comments. Creationists, Global Warming deniers, anti-vaxers, Randians, and Libertarians are automatically presumed to be idiots; Christians and Muslims might get the benefit of the doubt, if I'm in a good mood.
See the Debate Flowchart for some basic rules.
Sourced factual corrections are always published and acknowledged.
I will respond or not respond to comments as the mood takes me. See my latest comment policy for details. I am not a pseudonomous-American: my real name is Larry.
Comments may be moderated from time to time. When I do moderate comments, anonymous comments are far more likely to be rejected.
I've already answered some typical comments.
I have jqMath enabled for the blog. If you have a dollar sign (\$) in your comment, put a \\ in front of it: \\\$, unless you want to include a formula in your comment.
Note: Only a member of this blog may post a comment.