Romer’s Goodbye: We Need More Stimulus


In her goodbye speech as Council on Economic Advisors Chair, Christina Romer came out swinging (PDF) with calls for fiscal policy to support growth and employment:

The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less.

The measures should be chosen carefully so that they have the highest bang for
the buck possible. The state fiscal relief to prevent teacher layoffs that was just passed is an excellent measure. The small business tax cut and lending bill is also likely to have excellent job creation effects and should be passed. As the President said in his Rose Garden remarks on Monday, there are a range of other sensible measures that deserve consideration, such as tax cuts for struggling middle class families and businesses willing to invest in the United States, and much needed investments in infrastructure. The key is that we need to take action and we need to do it quickly.

Like a lot of people I sometimes fall into the trap of devoting almost exclusive attention to the presidential administration to the exclusion of other actors. But the truth is that whatever the failings of the White House’s approach to fiscal policy, they have been out there consistently pushing for somewhat more to be done. The really staggering thing, from the beginning, has been the unwillingness of congress to pony up.