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Peter Pandle's avatar

There is a problem here, not with the analysis which is economic science at its best, but with the assumption that it will be used to effect fiscal stimulus at the time when it is needed.

We have just gone through a major political debate in which our Congress decided that depriving some very poor people of food stamps is the way to reduce the fact that the US cannot raise enough revenue to pay for its expenditures. (Suffice it to say that the deal preserves the ability of the State to bond its debts.)

What the deal also says is that faced with evidence that a recession is upon us Congress will demand that the poor suffer through it. It will not do a direct deposit into their bank accounts.

What history shows us is that our ruling class can agree on one form of economic stimulus, military Keynesianism. War with China or Russia seems the more logical option for our brilliant politicians or at the very least privatization of Medicare and means tested social security along with further tax cuts to “stimulate investment”.

I’m only trying to be a realist here.

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Jeoffry Gordon, MD, MPH's avatar

FYI: In person, on the ground economic forecasting: I was in San Francisco last weekend. (1) Personal experience - I crossed the Bay Bridge at 5pm on Friday evening unimpeded at 50 mph, an experience impossible for more than the last 10 years. (2) The WaPo reports the Hilton, Union Square and a major office building have stopped making mortgage payments, dumping the properties on their banks. (3) The largest shopping mall in downtown San Francisco is still open with fewer merchants and has stopped paying its mortgage. Sure, there is more working from home, but the magnitude of these facts makes the center of the powerhouse California (driving the USA) economy look like a house of cards.

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