From the delong Twitterstream: September 30, 2011
R.I.P. Sylvia Robinson (1936-2011)

Ryan Avent: Ffiscal policy: Failure or Failure to Try?

Ryan Avent:

Fiscal policy: Fiscal policy failure or failure to try fiscal policy?: THAT Barack Obama's attempt at massive fiscal stimulus failed is an article of faith among some of the president's critics, not least because America's unemployment rate ended up rising well above forecasts produced by administration advisers in the months before Mr Obama's inauguration. This analysis misses the important point that the Obama adminstration pushed for a smaller (and in their view more politically viable) bill than economic conditions at the time seemed to call for, and economic conditions at the time dramatically understated the severity of the recession....

The President's latest plan aims to move the total government impact on growth from a drag of about 1.5 percentage points of GDP to approximately even. When the economy is growing at between 1% and 2% per year, a 1.5 percentage point drag on output is a very big deal indeed....

If the Fed were credibly targeting nominal output, there might be a case for leaving discretionary fiscal policy out of the mix. Given the who-knows-what-they're-doing strategy currently on offer from the Fed, it makes complete sense for the government to do what it can to support recovery. That's a point libertarian-minded critics of monetary stimulus ought to note; when the Fed does too little, the pressure on the government to spend more will be too great too resist.