Robert Shiller on the Need for More Stimulus

Earlier this month, we asked Fools if they thought more stimulus would help or hinder the economy. Twenty percent said it would help. More than half said it would hinder (the rest were unsure).

The question has been a hot topic since 2008 and 2009, when the federal government bailed out large banks such as Bank of America and Goldman Sachs, and followed up with one of the largest stimulus packages of all time.

The problem when gauging whether the stimulus packages worked is that we don't know what would have happened in their absence. It's easy to say the 2009 stimulus package failed because unemployment went on to top 10%. But the real question is whether it would have been much higher -- 15% or 20% -- without stimulus. And that, we just don't know.                   

In an exclusive recent interview, I asked Yale economist Robert Shiller about recessions, austerity, and stimulus. Here's what he had to say:

What do you think? Share your thoughts below.

Fool contributor Morgan Housel owns B of A preferred. Follow him on Twitter @TMFHousel. The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of The Goldman Sachs Group. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On January 12, 2012, at 12:41 PM, snipe15 wrote:

    what did he say? i see nothing of his interview.

  • Report this Comment On January 12, 2012, at 1:10 PM, Hawmps wrote:

    "Bankruptcy is a good thing. It's the way the market cleanses the economy of companies that shouldn't be there."

  • Report this Comment On January 12, 2012, at 1:19 PM, mdk0611 wrote:

    The most "shovel ready" project in the country right now is Keystone, and it doesn't need a dime of government stimulus money to get started. All it needs is an end to the obstruction.

    What Prof. Schiller doesn't address is how the funds from any future stimulus bill would be allocated. I'm sure they could be allocated in such a way that would cause a positive result. However, I have serious doubts that would happen. And what good, either short term or long term, would another Solyndra be?

  • Report this Comment On January 12, 2012, at 1:35 PM, HappyDwarf13 wrote:

    Stimulus? Print more money? Inflationary pressure?

    Doesn't float my boat.

  • Report this Comment On January 12, 2012, at 2:22 PM, DJDynamicNC wrote:

    Well, let's look at the situation.

    Are interest rates for borrowing exceptionally low? Yes.

    Are there projects around the country that need doing? God yes. Tons.

    Are there people who want to work but are unable to find work? And again, yes. Millions of them.

    Inflation does not just automatically happen when you put more dollars in circulation, nor is inflation automatically a "bad thing" the way some people seem to think it is (those people are likely people with substantial assets denominated in dollars, which would explain their aversion to inflation but does not imply that theirs is a sound policy for the nation as a whole).

    The question we have to ask ourselves is this: do we, as a nation, feel that resisting a few cents on the dollar worth of inflationary pressure (which may or may not even occur) is worth inflicting an unemployment rate of 8.5% or higher on the nation? Because I believe in sound economic policy, fiscal pragmatism, and compassion, the answer for me is a resounding "no" and I advocate strongly for proper stimulus.

    There are those whose interests are not aligned with mine or with the nations' interests who may feel differently, of course, and there are those who may feel that there is a moral argument for punishing people for living in a modern capitalist society without being rich, but I will forever oppose those people and their rule, and I'll be proud to do so.

  • Report this Comment On January 12, 2012, at 2:50 PM, DJDynamicNC wrote:

    You also have to remember that whenever people say "America can't afford it" when talking about putting people to work with government dollars, that they are lying to themselves and to you.

    America already employs teachers, firefighters, civil servants, and construction workers to do their jobs. When we talk about "stimulus," we're simply talking about employing more of them. What are the arguments against employing more of these people?

    1) "We don't need more." Well, that's obviously false - there are a plethora of tasks that are simply not getting done in America today due to lack of adequate provision.

    2) "We can't afford it." Well, why? Is America a poor country? Obviously not - we're the richest that's ever existed. Are we poorer now than we used to be? Not even slightly - in fact, productivity gains from technology have resulted in a trend towards ever greater per capita GDP (with some volatility from the recession, obviously). In a very real way, we're richer than ever.

    3) "We should be spending our money on something more important." Well, ok, then what? If your answer is "tax cuts for rich people," then you're A) a Republican and B) wildly out of touch with the priorities of the American people (but I repeat myself). If your answer is "blowing up Afghanistan and then rebuilding Afghanistan," well I propose that it would be more economically and strategically valuable to rebuild America before we go around rebuilding third world countries. We can even skip the blowing up step, then.

    4) "INFLATION ZOMG!!!!" As addressed in my comment above, inflation is neither automatically bad nor an automatic response to stimulus. For highly leveraged poor people, inflation is rather great - paying off ten thousand 2001 dollars with ten thousand 2013 dollars is a significant real savings. And of course, in a situation with low aggregate demand, inflation resulting from an increase in the money supply is likely to remain extremely manageable. Further, the Fed retains its full arsenal of inflation fighting tools if it becomes an issue - if you never do anything because something COULD go wrong, you'll never get anywhere in life.

    Borrowing money to make capital investments with the potential to generate additional revenue is the foundation of capitalism. We're always being told to run the country more like a business - well a smart business would take advantage of the confluence of extremely low interest rates, high demand for the product (money) and service (employment) in question, and favourable public opinion to make those investments.

  • Report this Comment On January 12, 2012, at 3:23 PM, dagrandpoobah wrote:

    DJDynamic NC

    America is rich, our government isn't. Our government has over 14 trillion dollars in debt. We simply can't afford to spend more money, we're already spending too much.

  • Report this Comment On January 12, 2012, at 3:28 PM, DJDynamicNC wrote:

    Poobah: If America is rich, and the government represents America, then can't we simply give the government more money?

    Treasury bills are selling like hotcakes, interest rates have never been better (literally never, that is not hyperbole), and tax rates are at historic lows. It was barely 10 years ago when we were staring down the barrel of the largest surplus in real dollars that any government had ever seen in all of human history. What did we do with all that money?

    We transferred it to rich people via regressive tax cuts and blew up a bunch of poor people.

    That certainly is ONE policy but it's not necessarily the BEST policy.

    I have a question for you: at what point will America have "run out" of money? And what happens when it does?

  • Report this Comment On January 12, 2012, at 4:15 PM, cflak wrote:

    When one has the debt load that America has taken on, then, we a resounding YES, "America can't afford it"

    The more people that work for government; the less free we are.

  • Report this Comment On January 12, 2012, at 4:29 PM, DJDynamicNC wrote:

    cflak: that sounds suspiciously like a platitude standing in for economic reasoning.

    Even if the claim is accurate - and I have my doubts - let's just assume that you're right, and the more people working as teachers, firefighters, and policemen we have, the less "free" we are. Obviously we need SOME policemen and teachers. Consequently, you're clearly willing to accept a certain impugning of your freedom in pursuit of the common good.

    With that understanding, what is the precise level of government employment, given in terms of percentage of the labour force, beyond which you would have too little freedom and would no longer accept the economic system as valid? What is the ideal proportion?

  • Report this Comment On January 12, 2012, at 4:46 PM, phillyarchitect wrote:

    As I understand it, we're currently running a 1.3 trillion dollar deficit of which 400 billion is the war in Iraq, 300 billion is the war in afghanistan, 300 billion is the Bush Tax Cuts, and 300 billion is the recession.

    To rectify this (a) wind down the two wars (which we're doing); (b) let the Bush Tax Cuts expire as intended; and (c) Take on short term debt to start an infrastructure construction stimulus program to end the recession. In four years we will be back in surplus. We have to be diligent to not use this as an excuse to expand government but to start paying down our debts.

  • Report this Comment On January 12, 2012, at 6:12 PM, CaptainWidget wrote:

    Is it just me, or are Yale econ professors extremely inarticulate?

    America has the lowest savings rate on earth...we don't need to borrow more on any level. If tax cuts and stimulus have the same economic effect, why not avoid the borrowing and just cut taxes??

  • Report this Comment On January 12, 2012, at 6:29 PM, DJDynamicNC wrote:

    If tax cuts and stimulus had the same economic effect, that would be fine, but they don't.

    The more unequal the distribution of wealth becomes, the more redistributive taxes are. Because our rich people are so much richer than our working class, any public expenditures will disproportionately be paid for by them. Those public expenditures will go directly into the economy; tax cuts, on the other hand, will also go disproportionately to the rich, and thus into savings accounts, CDs, and stocks. Since those investments are secondary market investments, they don't represent capital infusions for the economy (except the fees that go to finance professionals) but simply additional savings holdings. That is not stimulative.

    Unfortunately, rich people also have the least need for public services, and so they constantly argue for additional tax cuts, as cutting public services will have no impact on their day to day life that they can see (until the cuts are so drastic that they one day wake up and find that the rest of the economy has collapsed and they no longer have any customers for their businesses).

    Rich people are (usually) not evil, but their interests do not align with the interests of the working class. Healthy capitalism allows for a good to-and-fro between labour and capital to ensure the economic well being of both.

  • Report this Comment On January 12, 2012, at 7:11 PM, CaptainWidget wrote:

    Why not cut taxes on everyone, and raise personal exemptions?

    Then the rich get the benefits of tax cuts on their high incomes, and the middle class get the benefits of greater deductions and more money in their pocket.

    Everyone wins...and the government didn't have to borrow a dime!!!

    Your argument is so full of holes I can't bother to attack it all (stock investments don't help the working but...just focusing on the obvious, that the gross effects of tax cuts would be much more beneficial than stimulus

  • Report this Comment On January 12, 2012, at 7:35 PM, yragca wrote:

    Is he talking about the bank bailouts (primarily easing of monetary policy coupled with loans to banks) or stimulus (the fiscal spending of the $800 billion).

    I think the bank bailouts were pretty clearly successful and that is pretty easy to prove. Most of the loans have been repaid with interest-that's been a money maker. And the Fed continues to make money annually and return it to the Treasury, at higher levels than before the recession. the last two years have been about $75 billion a year, highest ever. That happens with a larger balance sheet, as long as the balance sheet doesn't implode, and it hasn't and I don't think it will.

    But the stimulus it seems to me was far less effective. Obama says things weren't shovel ready. The unions got paid off big time with the GM fiasco--all of that could have happened through bankruptcy procedures, just like so many companies that have fallen on hard times--see United Airlines and many others. Teachers kept their jobs for a while and other state employees at the bloat salary and benefits given to them by profligate politicians over the years. Oh, and how about the payback to fat cat Democratic VC's--think Solyndra or whatever.

  • Report this Comment On January 12, 2012, at 7:43 PM, yragca wrote:

    But phillyarchetict: your comment "As I understand it, we're currently running a 1.3 trillion dollar deficit of which 400 billion is the war in Iraq, 300 billion is the war in afghanistan, 300 billion is the Bush Tax Cuts" and that totals $1 trillion. But the president's budget, that was turned down by the Senate 99-0 or something like that, took all of those things out after 2013, and we continue running $1 trillion deficits--according to Obama. Something doesn't compute.

  • Report this Comment On January 12, 2012, at 11:17 PM, devildog1998 wrote:

    The problem with stimulus is that it provides artificial support to the economic environment. Now, in order to see further expansion of the economy/GDP, more money must be injected into the system causing more borrowing and more debt.the system wil self-perpetuate until the system can no longer support itself i.e., what the European socialist states are experiencing now. By having the private sector take the lead on driving a recovery, they are using private capital more efficiently and effectively so the cycle will grow naturally with internal supports, generating a self-contained growth.

  • Report this Comment On January 12, 2012, at 11:48 PM, MichaelDSimms wrote:

    A report written by the White House’s Council of Economic Advisors, a group of three economists who were all handpicked by Obama, and it chronicles the alleged success of the “stimulus” in adding or saving jobs. The council reports that, using “mainstream estimates of economic multipliers for the effects of fiscal stimulus” (which it describes as a “natural way to estimate the effects of” the legislation), the “stimulus” has added or saved just under 2.4 million jobs — whether private or public — at a cost (to date) of $666 billion. That’s a cost to taxpayers of $278,000 per job.

    This is not job creation, it's rape of tax funds and outright purchasing of votes. We would have a lower deficit without it, by about 900 Billion dollars.

  • Report this Comment On January 12, 2012, at 11:55 PM, Edeskimo wrote:

    I am a Canadian.

    For those who argue that stimulus cannot work I would offer Canada as an example where it worked. However, you have to remember that while the amount of stimulus applied in the two countries was the same, in Canada it was all new spending. The money that was offered had to be spent on new projects which could be started in the next two years - i.e. shovel ready. The money offered by the federal government then had to be administered and matched by the provinical governments.

    My understanding is that the US program was flawed in that the state governments often took much of the money and used it to avoid laying off people who otherwise may have been laid off. That is while it was stimulus from what otherwise would have happened, much of the money was not used on new projects so the effect of the program was diluted.

    Up here we basically did kill off the recession and regained basically all of the lost jobs.

    The other thing that is really keeping you guys down is the lack of construction. Normally this should be 5-10% or so of GDP. Right now you guys are spending way less than that so that is a major contraction in normal economic activity that is not being picked up by the private sector. I really think you guys should put your citizens back to work in those construction jobs but it should be on major public infrastructure projects that need to be done. Without enough construction activity ongoing you won't get out of your slump for another 5 years and that causes a lot of damage to the persistently unemployed and scars the psyche of the nation.

  • Report this Comment On January 13, 2012, at 1:12 AM, CaptainWidget wrote:

    The Canadian government balances it's budget year on. It's an apples to oranges argument.

    The Canadian government could do whatever ridiculous things it wanted with tax dollars, because ultimately, next year those stupid investments would have to be paid off by tax raises or cuts in other programs. This forces immediate feedback by the voter, keeping fiscal policy in check through political policy.

    In the US all Federal increases in spending have shown to be permanent, regardless of revenue. "Stimulus" is just a cute way of saying "bigger government"

  • Report this Comment On January 13, 2012, at 8:30 AM, Rockythecat wrote:

    I think it would be interesting to hear what Dr. Shiller has to say about what we should do to ensure that we don't get in the position of having to bail out too-big-to-fail organizations in the future.

  • Report this Comment On January 13, 2012, at 9:22 AM, ejazz2095 wrote:

    This guy should be beaten unmercifully.

  • Report this Comment On January 13, 2012, at 9:36 AM, DJDynamicNC wrote:

    >-- "Your argument is so full of holes I can't bother to attack it all (stock investments don't help the working"<--

    You didn't actually attack any of it; the only "quote" you included isn't even something I said.

    "Your attack is so weak I won't even bother to respond" sure does sound like a cheap cop out for somebody who doesn't have a response.

    >--"just focusing on the obvious, that the gross effects of tax cuts would be much more beneficial than stimulus" <---

    That's why the massive Bush tax cuts resulted in unparalleled economic growth, right?

    Although I'm sure the crash of 2008 is somehow Obama's fault too.

    I find it telling that you accept that the stimulus worked in Canada (which is what you said, for all that you equivocated on the political ramifications, which is totally fair), as Edeskimo pointed out and as I am willing to back up.That means we're having a different argument entirely - not whether or not stimulus CAN work, but whether or not the particular Obama stimulus DID work.

    As such, it is good to see that you accept the basic Keynesian principle, and I applaud your willingness to revise your opinion in the face of real-world empirical evidence.

  • Report this Comment On January 13, 2012, at 9:40 AM, DJDynamicNC wrote:

    @Edeskimo - my Canadian immigration packet was accepted yesterday, so I will be joining you up north in a couple of months. :)

  • Report this Comment On January 13, 2012, at 9:55 AM, 91x9x19 wrote:

    I disagree with almost everything he says.

  • Report this Comment On January 13, 2012, at 12:43 PM, Ned99 wrote:

    I disagree with DJ whole-heartedly. The question of debt is so casually dismissed. Our debt is crushing, and only getting worse. Things are not stagnant, what weighs on the debt today may not be the driver later. Our social programs if not restrained will tank the budget. These jobs like firemen, teachers etc..what happens in 1 or 2 years when government can't fund extra jobs? And just because a stimulus worked in a country 1 /10th the size as US doesn't prove it will work here. Lastly the camp who want more stimulus how much? We've spent 1 trillion already, with questionable results. So should we spend 2 more how bout 5? Then what if we guessed wrong? I'm not willing to bet my grandsons future on the bet.

  • Report this Comment On January 13, 2012, at 2:49 PM, DJDynamicNC wrote:

    @Ned: It's fair to disagree. I do have some questions for you to perhaps help me get to the bottom of why we disagree.

    1) In what way, precisely, is our debt crushing?

    2) Precisely which segment of the economy is being depressed by the existence of large quantities of United States treasury bills, and to what extent?

    3) If US debt is so existentially dangerous to the United States, why is the market pricing interest rates for T-Bills so low?

    4) If US debt is so crushingly dangerous to the existence of the nation, how did we survive and prosper after previously holding much higher debt levels?

    5) If some debt is acceptable, at what level do you believe debt becomes no longer acceptable, as a proportion of GDP? Why do you select that number?

    6) If we hold the debt level steady but the economy continues to grow, won't we see debt as a percentage of GDP automatically begin to decline, as happened after World War II?

    I feel that answering these questions could help both of us develop some insight into the nature of debt in this nation, and its future.

  • Report this Comment On January 13, 2012, at 4:41 PM, duane1x wrote:

    DJ, you have offered some thoughtful comments on this thread, and we are in general agreement on the less war and fewer tax cuts ideology.

    Nonetheless you act as if we are not currently borrowing at low interest rates and spending, and what other responders point out is that the US is already tapping this opportunity in prodigious amounts. You ask for clarity on others' numbers - at what point do we run out of money? What level of govt employment is too high? But how about clarifying your own position? At what point does borrowing become a problem for you? Is their no limit to what you will accept? And what you're hearing back, I believe, is that for many, borrowing in excess of $1T per year is enough already.

    You repeat the call for teachers, police and firefighters, but this is largely a local funding item paid for thru local sales and property taxes. This has nothing to do with the federal govt printing dollars. There are areas of the country where property taxes are quite high, and indeed a person on an average salary cannot afford to buy a home for no other reason than the annual tax bills. If what you want is more firefighters, then are you really arguing that municipalities should be out there borrowing more, or taxing more? They can't print it, however, and so that is a quite different case. You might also want to quantify how many months a person on an average salary should have to work to pay property taxes on a decent house in a decent neighborhood.

    If your take home after tax income is $4000/month - higher than the median household income, by the way - and you spend two months of it on local and property taxes, three months of it on federal taxes, and 1-2 months of it on health insurance premiums. You've worked more than half the year just to get back round to the basics of food-shelter-clothing. What point is enough?

  • Report this Comment On January 13, 2012, at 5:16 PM, DJDynamicNC wrote:

    @Duane: Those are fair points.

    I would suggest running deficits at a level appropriate to fund infrastructure repairs and modernization, the full slate of social programs already in place (Medicare - extended to all citizens - and Social Security being the primary examples of such), and additional subsidies for higher education. I would expect this to increase government spending as a share of GDP to several percentage points higher than we have at present. I would also propose a "stimulus" plan of offering direct government employment for those who have been unemployed long enough for unemployment benefits to run out. I'm always willing to support direct state aid from the federal government to make up for state budget shortfalls.

    I would suggest partially offsetting these expenditures through expiration of the Bush tax cuts, an end to the payroll tax cap, an end to our Afghanistan presence and the closure of unnecessary overseas military bases (does Germany still need an Army base?), a reduction in defense spending, a higher appraisal of capital gains taxes and higher graduations of the income tax (in other words, adding a "millionaire's" tax bracket at a higher rate of taxation) as supported by Warren Buffett.

    In other words, I am directly proposing a redistributive economic policy to address the shortfall in aggregate demand caused by the credit crunch we've experienced since the popping of the housing bubble, bringing the velocity of money back up to pre-recession levels and freeing us from the trap we're in. At that time, when surpluses have been restored by increased economic activity, we can absolutely begin to pare down the debt - even holding the debt steady for a matter of a few decades while the economy grows under it would be sufficient to effectively address the problem, but I would advocate for an even more aggressive debt reduction program once we have navigated the aggregate demand trap. And the federal government CAN print dollars, as many as it takes.

    The positives of this plan are that it would directly begin to put people back to work, it would invest in the nation directly and build for the future, it would end our shipping of dollars overseas through our military adventurism, and it would redistribute productivity gains back to those who are actively producing them, counteracting a decade of stagnant wages for the working class. The negatives include the risk of increased inflation (not necessarily a negative but with the potential to occur in excess). However, the Fed retains the tools to address inflation when it occurs - we are not defenseless. I will absolutely stand firm in my belief that running the risk of inflation in order to put people to work is worth it, particularly with a fully-loaded magazine of tools for inflation fighting and particularly while this nation suffers from crisis levels of unemployment.

    What your "work half the year just to get to basics" analogy misses is that you pay those taxes and then receive benefits - a sound economy (and compared to most, we're still well ahead of the game), national infrastructure, clean food and air, national security, an educated work force, transportation, a legal system, and more. You aren't just dumping your tax money in a lake somewhere; you pay taxes, and in exchange, you get the United States of America. That's an investment I'm more than willing to make - and your continued presence here indicates you've made the same rational decision.

    We can certainly disagree on the direction the country should take, and I respect your disagreement with my position even while I am firm in my own stance and reasoning.

  • Report this Comment On January 13, 2012, at 5:30 PM, DJDynamicNC wrote:

    To be clear - it's entirely possible that I am completely wrong! But my proposal is not some fringe idea, it's well within mainstream thought - and for a reason. Krugman has been barking up this tree for years, Romer called for a bigger stimulus durring the ARRA days, and Keynes is (despite the Austrians' best efforts) still a cornerstone of basic economy theory. Heck, Krugman's column today directly deals with this.

    What's more, you have only to look at Europe to see austerity failing and people - real, live human beings - paying the price. I am happy to live in a country that takes more money out of my wallet to ensure that every single person has health care, shelter, and an education, and I am more than willing to devote time, energy, and money to achieving that goal. It is a moral imperative, to my mind, to build this nation together and to take care of each other.

    This is an investing website, and I have learned a lot here, but I feel there is no better investment I could make than in the people of the United States of America.

    ALL the people.

  • Report this Comment On January 14, 2012, at 4:40 AM, CaptainWidget wrote:

    << I am happy to live in a country that takes more money out of my wallet to ensure that every single person has health care, shelter, and an education, and I am more than willing to devote time, energy, and money to achieving that goal. It is a moral imperative, to my mind, to build this nation together and to take care of each other.>>I'm glad you feel that way, I just tore my hamstring at the gym, and it's going to take a 10K dollar surgery to fix it. I'll be expecting that check by the end of the work day Monday.

    And no, this is not a joke. I really tore my hamstring and I really need you to pay for it. Thanks for offering. Send me a private message and I'll email you my post address.

    Onto a more fruitful America!!!!

  • Report this Comment On January 14, 2012, at 6:31 PM, jhs9256 wrote:

    It is true that we don't know what would have happened if it was not for the stimulous package and almost free funds to borrow by our Banks.

    I do know that millions of Americans that had nothing but bank accounts for investing lost the income from Savings and CD's. A 3 or 4 percent on Savings was not uncommon. A 5 or 6 percent on CD's was not uncommon. Today, a .6% for savings is not uncommon and a 1 to 1 1/2% is not uncommon for CD's

    Has anyone calculated the amount of money that investors with bank accounts have lost? A lot of this money would have been plowed back into the system. Would this not have kept the system going?

    No one has commented on the loss of income by millions of investors who formerly relied on Savings accounts and CD's

  • Report this Comment On January 14, 2012, at 7:00 PM, jhs9256 wrote:

    I have never griped about paying taxes until my taxes were cut by George Bush. Yes, I was mad about the tax cuts because I knew that the tax cuts were for rich people. My wife and I received about $600 and Warren Buffet received more than 3 million. Does anyone really think that Warren or others really needed the money?

    Our budget was balanced by President Clinton while the tax rates were what they could be today if the Busch tax expired. I did'nt hear any millionaires complaining about their taxes when Clinton was president.

    Costs have changed and those with earnings under $50,000 are starting to hurt. It makes no sense to me of taxing people and giving back part of it to people that cannot afford life's cost.

  • Report this Comment On January 15, 2012, at 1:29 AM, CaptainWidget wrote:

    <<Our budget was balanced by President Clinton while the tax rates were what they could be today if the Busch tax expired. I did'nt hear any millionaires complaining about their taxes when Clinton was president.>>

    The budget was balanced by the House of Representatives (as it is always is...all spending originates in the Congress) and, after a few veto attempts and some political gesturing, Clinton simply went along with it and made due with the reduction in spending.

  • Report this Comment On January 15, 2012, at 12:52 PM, JackCaps wrote:

    Rather predictablely, a statist Keynesian economist calls for more government spending after growing the national debt by about 80% in three years so that it now equals the GDP! Dr. Schiller then expresses his surprise, after the Government's investments in Solyndra and the redistribution of GM ownership from shareholders and bondholders to union members; that the public is not more appreciative of all the hard word that went into these statist policies.

    Surprisingly, Dr. Schiller actually admitted that "the New Deal was not a spectacular success". After the spending binge of the Great Depression and that of the Great Recession, statists have only their one trick pony show - they would have governments spend beyond their tax revenues and accrue even more debt indefinitely.

    History repeats itself for those who are unaware of it, or in Dr. Schiller's case, those who choose to ignore it. Do us all a favor Dr. Schiller; retire and take your failed statist policies with you.

  • Report this Comment On January 19, 2012, at 12:10 PM, DJDynamicNC wrote:

    @Captain: I've paid extra in my taxes all year, I'll be sure to earmark it to your insurance subsidy under Obamacare instead of paying down the deficit. :)

  • Report this Comment On January 21, 2012, at 11:23 PM, underdone wrote:

    With treasury stock on issue of close to 90% of GDP and a budget deficit close to 10% of GDP stimulus now will mean austerity later, so absolutely not - too late.

    But liquidity would make sense.

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