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Robert Samuelson Is Tired of Stimulus

That's the gist of his column today. After all, it really gets exhausting watching folks like Ben Bernanke try to create jobs for people who are unemployed because folks like Alan Greenspan and Ben Bernanke were too incompetent to recognize an $8 trillion housing bubble.

I'm not kidding. Here's the opening line:

"We are reaching — or may already have passed — the practical limits of 'economic stimulus.'"

Samuelson concludes the paragraph by telling us:

"The average response of 47 economists surveyed by The Wall Street Journal was that a similar program might cut the jobless rate 0.1 percentage point over a year."

Wow, that sure sounds like the end!

Okay, this is getting beyond silly. Limited stimulus has limited impact. Bernanke proposed (in my view) a very limited measure. I answered a different poll the same way, its impact on employment would be limited. (I still wouldn't dismiss the possibility of creating 200,000-300,000 jobs at no cost.) Only in Washington Post land would this imply that stronger stimulus would not have more impact.

Suppose Bernanke had said that he would buy enough bonds and mortgage backed securities to lower the 30-year mortgage rate to 2.5 percent as advocated by former Fed economist Joe Gagnon? Suppose Bernanke had pledged to buy enough bonds to raise the inflation rate to 3-4 percent, a policy he advocated for Japan's central bank in 1999.

Dean Baker / September 17, 2012