In a July 25 op-ed, economist Mark Zandi of Moody’s Analytics defended the 2009 stimulus bill. Says Zandi: “If government had not reacted as aggressively or as quickly as it did, the financial system would still be unsettled, the economy would still be shrinking, and the cost to U.S. taxpayers would be vastly higher. In sum, the government's unprecedented response stabilized the financial system and ended the recession.”
In a July 20 commentary, economist Robert Skidelsky defended the Keynesian view of the current recession and decried the growing support for fiscal consolidation, which he believes will lead to another crisis.
In a July 19 commentary, Nobel Prize winning economist Vernon Smith argues that reducing taxes on businesses, especially new start-ups, will do more to expand employment than more government spending.
In a July 18 commentary, University of California, San Diego, economist James Hamilton argues that despite the modesty of the economic recovery, there is no doubt that the recession ended in the summer of 2009.
In a July 16 commentary, New York University economist Nouriel Roubini is very bearish on economic growth. As the effects of monetary and fiscal stimulus wear off, he thinks the economy is in for a protracted period of sub-par growth.
On July 14, National Economic Council director Lawrence Summers posted an analysis presenting the case for extending unemployment benefits and criticizing opponents. This was a topic on which he did considerable research as an academic economist.
On July 12, the Treasury Department issued a report estimating that the employers of up 4.5 million workers are eligible to receive up to $8.5 billion in tax credits if they stay employed for one year or more.
In a July 2 commentary, the Brookings Institution estimate that it will take between 5 and 10 years before the economy makes up the job losses suffered during the recent recession.
In a July study, the European Central Bank compared the efforts of European countries to the United States in terms of stimulus measures and other extraordinary actions to deal with the economic and financial crisis. It finds a great deal of similarity in their approaches.
On June 21, the International Monetary Fund concluded its annual Article IV consultation with the U.S. and urged that greater efforts be made to reduce the projected debt/GDP ratio. Unless this is done, the IMF fears that the U.S. will have no maneuvering room when the next recession hits. TFT’s Eric Pianin and Ed Andrews commented here.
In the Summer issue of the Journal of Post Keynesian Economics, University of Tennessee economist Paul Davidson has an article that defends the necessity of budget deficits to produce sufficient aggregate demand to produce full employment. Says Davidson, “Just as we expect the federal government to spend whatever is necessary to protect us from foreign enemies during a war, we should also expect the government to spend whatever is necessary to protect us from the economic terrorism of a great recession.” (Note: I took a course from Davidson many years ago at Rutgers.)
Note: I previously posted readings on stimulus on July 12 and June 8.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Read his most recent column here. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).
