Tuesday, October 21, 2008

Ricardian Equivalence Again Recognized

You heard it here first. Then the Washington Post. Now Professors Scharfstein and Stein explain how the Treasury Bailout Plan is less potent than you might think.

My editorial "Is the Treasury Impotent?" on this topic is still sitting at at a newspaper op-ed page for their consideration. I will post it here soon.

3 comments:

Sheng said...

yeah in the end you find out the best solution is to nationalize these banks and let them lend to each other just like you lend from your left arm to your right arm. That's the heaven without any crisis.

Sheng said...

Oh, and you have to forbid these banks from using the money lobbying too, and the executive pay curbs.... The list could go on and on...I would say the Treasury appears very ambitious rather than impotent.

Donald Pretari said...

I don't know what you mean, other than it's a credit stimulus plan without much of a stimulus. Other than that, it makes perfect sense.

Don the libertarian Democrat