Greg Mankiw has a brief but excellent discussion about the four goals of tax policy with a tie to the current political debate. Greg ends this discussion with:
Critics of fiscal stimulus come in two varieties. One type of critic discounts goal 4 entirely because they are skeptical of Keynesian theories that underlie this goal. A second type of critic admits that goal 4 is legitimate in principle but believes that in the current environment macroeconomic stabilization is best left to monetary policy so fiscal policy can focus on goals 1 and 2. I am in this latter category.
All I have is say is: “I wish I had written this” - although I would have included goal 3 on the list.
Post a Comment