Wednesday, November 29, 2017

We Iz Smart Economists

The scuttlebutt is that our genius senators are moving from triggering tax increases on the off chance their magic tax plan doesn't reduce the deficit (or something like that) to triggering spending cuts. Or some combination. The former would be better depending on who it falls on, but either way this basically means that if there's a recession we're going to have contractionary fiscal policy, which is something that even in the most conservative Econ 101 textbook you will probably learn is Bad. Especially since 9 years later the Fed is still basically at the zero lower bound, so there's not much they can do (well, there is... helicopter money! but they won't.)