Larvatus Prodeo

Picking up on Reserve Bank governor Glenn Stevens’ remarks about “borrowing to invest” and not being afraid of a deficit if there are good policy outcomes to be had, eight prominent economists (including a couple of blogging ones) have written an open letter to Kevin Rudd making suggestions for a further fiscal stimulus under three headings of policy – Superannuation flexibility, Building the nation and Preparing for climate change. The text is here at Troppo (one of the authors is Nicholas Gruen).

There’s been a bit of press coverage this morning, and no doubt it’s a worthy thing to stimulate debate by proposing substantive policy measures rather than just advancing critique. It may be an even worthier thing to shift the terms of the debate, regardless of the merits of the proposed policy directions. We don’t see enough of this sort of initiative.

But I do wonder if the economists stop and think about the political feasibibility of their proposals.

Continue reading ‘Fiscal stimulus: Eight economists and a few politicians’