Två Harvard-professorer i nationalekonomi har tagit till orda angående hur krisen bäst bemöts finanspolitiskt: med utgiftsökningar eller skattesänkningar.
I take it that you are fairly skeptical in general that fiscal policy will boost aggregate demand.
Right. There’s a big difference between tax rate changes and things that look just like throwing money at people. Tax break changes have actual incentive effects. And we have some experience with those actually working. …
Are there any conditions under which you might think spending could have a positive effect on output or is it always going to be the case that as a relative matter that tax cuts are going to be better?
Tax cuts are bound to be better. I think the best evidence for expanding GDP comes from the temporary military spending that usually accompanies wars — wars that don’t destroy a lot of stuff, at least in the US experience. Even there I don’t think it’s one for one, so if you don’t value the war itself it’s not a good idea.
(Notera förresten hans frejdiga motangrepp på Paul Krugman.)
I would institute an immediate and permanent reduction in the payroll tax, financed by a gradual, permanent, and substantial increase in the gasoline tax. I would make the two tax changes equal in present value, so while the package results in a short-run budget deficit, there is no long-term budget impact. … Some traditional Keynesians would object that government spending has a larger multiplier than tax cuts. Even though that is the prediction of standard Keynesian models, the evidence is not completely consistent with that conclusion … In addition, given the lags inherent in large spending projects, and the risks inherent in hasty spending at the federal level, the case for taxes over spending as the fiscal instrument of choice is compelling.