Wednesday, February 11, 2009

Leading Economists on the Stimulus

For the economy in general, doing nothing is vastly preferable to doing the stimulus package, but doing nothing is not a political option; indeed, it would be political suicide. Which shows that only by adopting economically destructive policies can politicians survive. Do you see something wrong in this picture? Given the dominant ideology and the political institutions that now exist, economically rational public policy is incompatible with political viability.

Robert Higgs

The best thing the government could do is to cut spending and taxes. Doing nothing is a second-best option.

Jeffrey Rogers Hummel

I would like to see more proof of the statement that doing something is better than doing nothing. The Keynesian arguments upon which Obama's statements are based work out neatly in the textbooks, but there's little proof that they actually make things better, in aggregate, in the real world.

Megan McCardle

But in two years the recession will be over. And the myth will grow up—rather similar to the ones about FDR and war expenditure—that Obama did it. Essentially, Obama will get credit for the self-adjusting character of the economy.

Deidre McCloskey

No thought is given to the medium and longer-term consequences. We are very likely to have large inflation in the next few years.

Allan Meltzer

Doing nothing is always an option, and in my view it would be better than the stimulus.

Jeffrey Miron

And then Obama says he doesn't want to do tired old ideas, and failed economics. But he is doing exactly what the Republicans did: huge deficit-financed spending on largely useless or irrelevant programs designed to reward political friends.

Michael Munger

Nothing in the package increases the incentive to work, save, invest, or increase productivity.

William Niskanen

Every single crisis in the last 100 years shows that doing nothing would have been preferable to doing bad things.

Johan Norberg

The market economy has an underappreciated, but amazing ability to correct and reverse economic imbalances and problems on its own, and that economic self-correcting resiliency works best in the absence of government interference.

Mark Perry

read all the answers from the economists here.

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