Stimulus and Reconciliation


Brad DeLong’s talk on the failure of macroeconomic stabilization policy in the current crisis is excellent. One point I would make that he misses in his catalog of errors is that it should have been possible in 2009 to write a budget that included reconciliation instructions for possible additions to or subtractions from ARRA according to economic developments. This would have made it possible to enact more stimulus with 50 votes once it became clear that the unemployment rate was going to go higher than had been initially realized.