Throwing Money at the Problem
We’ve spent $350 billion to stimulate the financial system, thus far with no obvious effect. Naturally, this calls for dumping in that much again — and perhaps again after that. I discuss this odd situation over at New Atlanticist in a piece called, “Stimulus Has its Limits (But We Don’t Know What They Are).” My conclusion:
The beauty part is that we’ll never know what, if anything, worked. One presumes this crisis, like all its predecessors, will pass. When it does, analysts will cherry pick from among the myriad solutions we threw at the problem as evidence that their preferred solution is what did the trick. But it’s not inconceivable that doing nothing — were that a politically viable option — would have been just as effective.
Read the rest.