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Argument: Increasing food stamp benefits will not stimulate the economy
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Revision as of 06:36, 23 January 2008; Brooks Lindsay (Talk | contribs)
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Supporting evidence
- Greg Mankiw, Harvard Economics professor. "CBO on Fiscal Stimulus: A Strange Menu". January 15, 2008 - "Some of the proposals on the table strike me as particularly odd. For example: a temporary increase in food stamp benefits.
- In standard macroeconomic theory, the business cycle is symmetric. That is, stimulating an economy that is suffering from insufficient aggregate demand should be the opposite of cooling off an overheated economy to reduce inflationary pressures. Would anyone seriously propose a temporary cut in food stamp benefits in an overheated economy? I don't think so. Food stamps seem the wrong tool to address the business cycle.
- By contrast, the first line of defense against short-run economic fluctuations--monetary policy--is applied symmetrically. You cut money growth and raise interest rates in an overheated economy, and you increase money growth and lower interest rates in a lackluster on
