PEN-L list <[EMAIL PROTECTED]> writes: >> Ian Murray wrote: >> >Is acceptance of the crowding out argument a litmus test for econowonks >in >> >DC now? >> Maybe, but Stiggy lives on the Upper West Side of Manhattan. I think >> he's motivated more by partisanship - Dems good, Reps bad. Dems >> raised taxes in '93, Reps cut taxes in 2001, 2002, and 2003. >> Doug We >ll if the partisanship over tax policy always trumps fiscal strategies >why was the crowding out argument even brought up during Clintonism? The >Repugs. would never let fiscal policy/legislation get so far that there >could even be a prolonged testing of the argument either way, no? > The current debates over fiscal policy are truly weird and reflect partly positions taken for reasons of politcal expedience and partly the fact that the prevailing paradigm in macroeconomics these days is really supply-side economics. It's not really accepted to make Keynesian arguments anymore -- i.e, the paradox of thrift, fiscal stimulus. They can't be modelled within the general equilibrium, growth=capital accumulation=savings framework that dominates all mainstream macro, including Stiglitz's. Stiglitz and Krugman have been making these Keynesian arguments in public lately -- need to boost aggregate demand, liquidity traps and all that -- but they keep slipping back into the mainstream language.
Ellen
