I thought we were supposed to be borrowing and spending more to “stimulate the economy.” Now we find that the Secretary of the Treasury of the United States of America, the very man who’s urging us to do just that isn’t doing his share….he’s flying coach. What a selfish bastard, when he could be “stimulating” the airlines by flying first class.
Of course, cutting consumption and increasing savings is the rational response to the crisis, despite the fact that the administration is telling us to do the opposite. But at least they ought to get their story straight.
Chicago’s John Cochrane has some helpful comments in “Fiscal Stimulus, Fiscal Inflation, or Fiscal Fallacies?”
A cure should have something to do with the diagnosis. The classic argument for fiscal stimulus presumes that the central cause of our current economic problems is this: We, the people and our government, are not doing nearly enough borrowing and spending on consumer goods. The government must step in force us all to borrow and spend more. This diagnosis is tragically comic once said aloud.