Two interesting article in the New York Times explaining the renewed enthusiasm for fiscal policy to tackle the recession in the USA. Mainstream economists are embracing public spending to repair the damage caused by the recession and credit crisis - even those who have long resisted a significant government role in a market system. There seems to be agreement that direct government investment will be more effective than tax cuts in stimulating the economy. The lowering of interest rates isn't likely to have the desired effect due to the unwillingness of people to borrow ' panicked by investment losses or fearful for their jobs'.Links:
A New Enthusiasm for a Fiscal Stimulus
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