Must-Read: It is important that fiscal stimulus (a) not include too much of giveaways of monopoly rights over what should be public infrastructure to plutocrats allied with the régime, and (b) be debt-financed--I would say long-term debt financed. It is also important that Treasury, Fed, OCC, and company gear up to prepare to use reserve requirements of various kinds to manage the Treasury market. Such is only prudent when venturing into the unknown policy space that secular stagnation seems to call for.
That said, backup for my fiscal principles:
Four from the Fiscal Expansion File: Summers, Krugman, Yellen, and Romer and Romer:
Larry Summers http://larrysummers.com/2016/02/17/the-age-of-secular-stagnation/: "By setting yields so low and bond prices so high, markets are sending a clear signal that they want more, not less, government debt. By stimulating growth and enabling an inflation increase that would permit a reduction in real capital costs, fiscal expansion now would crowd investment in rather than out. Well-intentioned proposals to curtail prospective pension benefits, in contrast, might make matters even worse by encouraging increased saving and reduced consumption, thus exacerbating secular stagnation..."
Paul Krugman http://krugman.blogs.nytimes.com/2015/09/15/keynesianism-explained/?_r=0: "The implications for the world we’ve been living in since 2008 seem very clear: aggressive monetary expansion, plus fiscal stimulus as long as the zero lower bound constrains monetary policy..."
Janet Yellen http://www.businessinsider.com/janet-yellen-us-economic-outlook-speech-july-10-2015-7: "By 2011... fiscal policies were holding back economic growth. However, the effects... now seem to be mostly behind us..."
Christina Romer and David Romer https://ineteconomics.org/uploads/general/romer-and-romer-evaluation-of-friedman1.pdf: "For the permanent increase in spending, of which Senator Sanders is proposing roughly 1.4% of GDP, standard estimates indicate that it would increase GDP growth in the first year by between 1.4% and 2.2%. That is, the fiscal multiplier is between 1 and 1.6. After the first year, the continued higher spending would maintain the effect on the level of GDP, but not have any additional impact on its growth rate..."
