From the business section of today’s New York Times. Louis Uchitelle drew about the same conclusion I did in my post a couple of days ago, on the basis of that panel with Marty Feldstein and the SF Fed head. Click here for the full article —CJS
Economists Warm to Government Spending but Debate Its Form
By LOUIS UCHITELLE | January 6, 2009
SAN FRANCISCO — Frightened by the recession and the credit crisis that produced it, the nation’s mainstream economists are embracing public spending to repair the damage—even those who have long resisted a significant government role in a market system.
But there is not much agreement yet on what type of spending would produce the best results, or what mix of spending and tax cuts.
“We have spent so many years thinking that discretionary fiscal policy was a bad idea, that we have not figured out the right things to do to cure a recession that is scaring all of us,” said Alan J. Auerbach, an economist at the University of California, Berkeley, referring to the mix of public spending and tax cuts known as fiscal policy.
Hundreds of economists who gathered here for the annual meeting of the American Economic Association seemed to acknowledge that a profound shift had occurred.