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Brooks Wilson's Economics Blog: The IMF, Chinn and Continued Stimulus

Friday, July 9, 2010

The IMF, Chinn and Continued Stimulus

The headline screams, "IMF presses US to cut debt," but the story itself is a tacit endorsement of Obama administration policy to continue stimulus spending until growth is on a more secure footing.  Beatty writes,
"The central challenge is to develop a credible fiscal strategy to ensure that public debt is put -- and is seen to be put -- on a sustainable path without putting the recovery in jeopardy," an IMF report said.

The balance between spending to stimulate the economy and putting budgets in order has vexed countries around the world as the recovery has looked more and more precarious...

The IMF praised US efforts to cut the long-term deficit through health system reform, but said more needed to be done now.
Menzie Chinn at Econbrowser gives a spirited defense of deficit spending given current economic conditions in "A Specter is Haunting America."  While I am more of a deficit hawk and would like to see more immediate reductions in spending, I find reading Chinn profitable because he makes well reasoned arguments using established economic methods.  He also makes good use of empirical studies.  The linked post is a little technical for principles students but well worth the investment.  Replace this text with...

1 comment:

  1. Not only do I like the above comment, I enjoyed reading the many comments on Chinn's commentary.I think those who commented on his article made some very valid points as well.