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That's mostly the fault of the Republicans. After the crisis of 2008 we could have bounced back using either fiscal policy or monetary policy. Congress could ha
by lkrubner 3y ago
That's mostly the fault of the Republicans. After the crisis of 2008 we could have bounced back using either fiscal policy or monetary policy. Congress could have spent a few trillion in stimulus to get the economy back on track. By 2010 it was clear that the initial stimulus of $800 billion was not enough, so further stimulus spending should have been a high priority, but the Republicans blocked further fiscal action. That meant that the Fed had to do all the work, using monetary policy. We didn't get the kind of big stimulus spending we needed till 2020, when President Trump finally pushed through several trillion in stimulus spending in the face of the Covid-19 pandemic. But for years after 2008, the Fed had to do too much work, with monetary policy, because Congress was doing too little with fiscal policy. It would have been healthier for the economy if we'd had fiscal stimulus in the real economy rather than monetary stimulus in the financial economy. Wages would have gone up much more with fiscal stimulus.
- onetokeoverthe 3y ago[dead]
- junofan 3y agoThere’s absolutely no way a multi-trillion stimulus bill was passing in 2008–2010. I don’t think it’s fair to place blame on one party or the other.
- paulmd 3y agoIt certainly wasn’t going to pass when rahm emanuel vetoed the idea right out of the gate
- slaw 3y agoKeep alive too big to die was bad idea. Fed should do nothing especially it shouldn't keep low interest rates for many years.
- rayiner 3y agoI'm not an economist, but it seems like the multi-trillion Trump stimulus had the exact effect (high inflation) that people were afraid of in 2008-2010. I'm even inclined to agree with you: inflation is better and healthier than the financial gimmickry we did in 2008-2010. But the pushback to that seems to be much broader than "Republicans." Biden's approval rating on the economy is at 36%, and it's just 52% among Democrats 18-44. Americans seem to really hate inflation.