Thursday, September 6, 2012

The Fiscal Trigger Finger That Did Not Itch

In April, 2011, I suggested that the biggest flaw in the 2009 fiscal stimulus effort was that it wasn't "state-contingent" - i.e., that it should have been designed to automatically adjust with circumstances (which turned out to be much worse than expected when the administration first proposed the recovery act).  

That was an idea that came to my mind with the benefit of hindsight, but now Matthew Yglesias informs us that the idea of putting "triggers" in the stimulus was considered at the time.  I'd really like to know why they didn't include them - I think the US economy would be in much better shape if they had.

They - or the incoming Romney administration - may want to consider state contingent fiscal policy again when they deal with the "fiscal cliff" at the end of the year.

1 comment:

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