5 Ways Congress Can Bolster Growth
By DAVID LEONHARDT
NYT
For the sake of argument, let’s say that the Senate refuses to take the most obvious steps to help the economy.
These steps — like preventing layoffs of teachers, police officers and other government workers — are especially important now that the recovery has lost some steam. But we’re going to imagine a world in which the Senate is incapable of distinguishing between the long-run budget deficit (a big problem) and the near-term deficit (quite manageable, according to financial markets). So even modest, short-term spending bills can’t pass.
In that unpleasant world, could Congress still do anything to help the economy?
Yes, it could.
It could clear up some of the uncertainty about future government policy and, in the process, persuade companies to spend some of the $1.8 trillion in cash they have hoarded. Congress could agree to help struggling states if, and only if, they took steps to reduce their own long-term deficits. And Congress could push two opaque bureaucracies on opposite sides of the world — the Federal Reserve and the Chinese Communist Party — to do more for global growth.
(More here.)
NYT
For the sake of argument, let’s say that the Senate refuses to take the most obvious steps to help the economy.
These steps — like preventing layoffs of teachers, police officers and other government workers — are especially important now that the recovery has lost some steam. But we’re going to imagine a world in which the Senate is incapable of distinguishing between the long-run budget deficit (a big problem) and the near-term deficit (quite manageable, according to financial markets). So even modest, short-term spending bills can’t pass.
In that unpleasant world, could Congress still do anything to help the economy?
Yes, it could.
It could clear up some of the uncertainty about future government policy and, in the process, persuade companies to spend some of the $1.8 trillion in cash they have hoarded. Congress could agree to help struggling states if, and only if, they took steps to reduce their own long-term deficits. And Congress could push two opaque bureaucracies on opposite sides of the world — the Federal Reserve and the Chinese Communist Party — to do more for global growth.
(More here.)
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