The Peterson Institute Advocates for Increased Spending and Borrowing Discretion for Policymakers

The Peterson Institute for International Economics recently posted a paper by Peter Orszag (Lazard), Robert Rubin (Council on Foreign Relations, and Joseph Stiglitz (Columbia University) which proposes that policymakers be given increased discretion in government spending in borrowing. They propose “making the budget respond more automatically to economic distress.” This would be a significant departure from standard policies of at least attempting (or perhaps pretending) to impose fiscal restraints. If recent history and the current situation are any indication, any increased spending via new “automatic stabilizer” policies would be largely funded through central bank “money printing.” And for how long can we continue down that path?

Published by markskidmore

Mark Skidmore is Professor of Economics at Michigan State University where he holds the Morris Chair in State and Local Government Finance and Policy. His research focuses on topics in public finance, regional economics, and the economics of natural disasters. Mark created the Lighthouse Economics website and blog to share economic research and information relevant for navigating tumultuous times.

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