INDEX

INDEX

“Accounting for Sovereign Money” (Dyson and Hodgson), 143 Akerlof, George, 48 American Jobs Act proposal (2011), 110–11 American Recovery and Reinvestment

Act (ARRA, 2009) accelerated depreciation of business investments and, 110

Council of Economic Advisers’ analysis of, 108–12

Democratic Party support for, 89, 103, 107, 109, 111–12 emergency unemployment compensation and, 109–10 empirical studies of, 111, 117–22 estimated impact of, 107–8, 111–12 federal deficit and, 153 government spending provisions in, 53, 89, 109 inflation and, 130–31 infrastructure provisions and, 109

Making Work Pay credit and, 62, 84, 89–92, 103–5, 110

Medicaid funding and, 99, 109–10, 119–21 need for additional stimulus following, 53, 55, 108, 212

Republican Party opposition to, 53, 84, 89, 103, 107, 112 size of stimulus in, 52–53, 108 state balanced budget requirements and, 119 statutory funding formulas in, 117–18 tax cuts and, 53, 109 teaching jobs prioritized in, 109–10 transfers to state and local governments under, 53, 99–100, 117–21 unemployment and job creation addressed in, 52–53, 108, 111, 118–21 Arbess, Daniel, 182–83 Archer, David, 145 Ash, Michael, 32 Auerbach, Alan, 115–16 “Avoiding Default” (Olney), 164

balance-sheet recessions, 166–69 Ball, Laurence, 200 Bank of England, 189

Bank of Japan (BOJ), 184–85 Barro, Robert, 88–89, 114–15 Bear Stearns, 77, 80 Bernanke, Ben on Federal Reserve interest rates for bank deposits, 135

Great Recession recovery efforts and, 153, 155, 185 helicopter money and, 184, 193 on Japan, 183–85 on the portfolio rebalancing effect, 161–63 stimulus without debt proposal and, 185–88 Blanchard, Olivier, 31 Blinder, Alan, 48, 81, 169–71 Blyth, Mark, 189 Broda, Christian, 58–59, 62, 86–87, 95 Buiter, Willem, 192 Bush, George H. W., 154 Bush, George W., 51, 63–64, 72, 107

Caballero, Ricardo, 182 Carlino, Gerald, 121–22 Caruana, Jaime, 145 central banks. See also European

Central Bank; Federal Reserve accounting equity and, 145 balance-sheet problems and, 177 commercial banks compared to, 142, 145–46 government bond purchases by, 167–68, 191 in Japan, 184–85 monetary stimulus and, 88 stimulus without debt proposal and, 173–74, 177–78, 191 transfers to households during a recession and, 187–90, 193–94 transfers to Treasuries during recessions and, 177, 181–83, 191 Chodorow-Reich, Gabriel, 119–21 “Combating Eurozone Deflation” (Muellbauer), 175 Congress elections (2010) and, 110

Federal Reserve and, 5, 42–46, 54, 138–39, 150–53, 156, 186–87, 218–19

Great Recession recovery and, 52, 54–55 proposal to allow unilateral money creation by, 37–38, 191–92 standard fiscal stimulus and, 2–4, 20, 185, 197, 211 stimulus without debt proposal and, 5–6, 15, 18, 21–23, 27, 29, 32–34, 37–38, 40, 44–45, 147, 150, 186–87, 190, 192, 214–15, 218–19 tax rebates and, 4, 18, 22, 25, 29, 37–38, 46, 63–64, 90, 96, 182–83 temporary tax incentives and, 38, 101 consumer demand consumer confidence and, 23–24

Great Recession and, 17–18, 53, 78, 80, 82, 167 helicopter money and, 192, 194 household debt and, 164–65 housing bubbles and, 48 income inequality and, 196–97 inflation and, 10, 127–30, 135–36 interest rates and, 28, 36, 47–48

Keynesianism and, 13–14, 48 marginal propensity to consume (MPC) and, 67–69, 81–83, 94 portfolio rebalancing effect and, 157–58 production output linked to, 10–11, 18 recessions and, 1, 5, 10–11, 13–14, 25, 38, 159, 164, 219

secular stagnation and, 195–99, 217 slow population growth and, 197 small business survey data regarding, 50 standard fiscal stimulus and, 5, 18 stimulus without debt proposal and, 17, 23–24 stock market declines and, 10, 21, 48 tax rebates and, 11–12, 21, 24–25, 30, 50, 58–62, 65–72, 75–91, 95, 100, 171, 192, 215 Corbyn, Jeremy, 193–94

demand-induced secular stagnation.

See secular stagnation Democratic Party

American Recovery and

Reinvestment Act supported by, 89, 103, 107, 109, 111–12 economic stimulus debates in

Congress (2009–10) and, 46 long-term tax cuts opposed by, 106 payroll tax cut (2011–13) and, 92 spending on long-term programs supported by, 106 Dillon, Douglas, 142 Douglas, Paul, 142 Draghi, Mario, 193–94 Dyson, Ben, 143

Economics of Control (Lerner), 14 Economics of Employment (Lerner), 14 Economic Stimulus Act of 2008 bipartisan support for, 45–46, 72, 107 bonus business depreciation provision in, 46, 51, 53, 101, 106–7 economic impact of, 52, 107–8

need for additional stimulus following, 52–53, 107–8, 212 size of, 51, 53, 72, 107–8 tax rebates and (see tax rebate of 2008) European Central Bank (ECB) balance sheet of, 177 inflation targets and, 152

Longeran’s proposal regarding helicopter money and, 176–77

Muellbauer’s proposal regarding quantitative easing and, 175–77 prohibitions against financing fiscal stimulus enacted by national legislatures via, 194 stimulus without debt proposal and, 174–77, 217 Eurozone countries (EZ), 17, 174–78, 217

Federal Deposit Insurance

Corporation (FDIC), 5 federal grants to state governments

American Recovery and

Reinvestment Act and, 53, 99–100, 117–21 conservative criticisms of, 99

Medicaid matching rates and, 99 objective numerical formulas for, 98–99 phasing out of, 100 political pressure to avoid severe spending cuts and, 123, 125 recession of 2001 and, 100 state balanced budget requirements and, 57, 119, 122–23 state government borrowing contrasted with, 123–25 states’ accounting rules regarding, 56–57 stimulative effect of, 4–5, 98–99, 122–26, 216

Federal Reserve. See also central banks accounting rules regarding government bonds held by, 19–20, 33, 38–39, 41, 143, 190 accounting rules regarding paper money held by, 3–4, 137–43, 146–49, 212, 217 asset creation by, 143–44 balance sheet of, 23, 41–42, 45, 137–49, 153, 217 bank deposit rates at, 135

Board of Governors of, 151–52

“bond-burning plan” and, 39–40

Congress and, 5, 42–46, 54, 138–39, 150–53, 156, 186–87, 218–19 credit liquidity and, 5, 27–28, 47, 157–58, 168, 219

Federal Open Market Committee (FOMC) and, 5, 27, 33, 44–46, 152, 186, 212, 218–19

Federal Reserve Act amendment of 1977 and, 151–52

Federal Reserve Act of 1913 and, 5, 22, 43–46, 54, 151, 153–54, 213, 218–19 fiat money system and, 140, 144 funding sources for, 151 government bond purchases by, 15, 19, 23, 28, 35–36, 133–35, 137–38, 146, 153, 156–57, 159, 161–63, 169–70, 183, 214

Great Recession recovery policies and, 153, 155, 158, 168–69, 185 housing bubble of 2007 and, 158 independence of, 42–43, 150–56, 186–87, 217 inflation targets and, 23, 29, 33, 42, 151–55 interest rates set by, 27–28, 42, 47–48, 135, 151–52 lender of last resort role of, 27–28, 47, 157

mortgage-backed securities purchased by, 134, 162 paper money held by, 15, 23, 29, 41–43, 45, 137–40, 143–44, 146–49, 214, 217 president of United States and, 151 rescue of financial firms and, 28, 158, 168, 219 stimulus without debt proposal and, 27–28 transfers to Treasury under stimulus without debt plan and, 3, 5–6, 11–12, 15, 17–18, 21–22, 26–27, 29, 32–35, 37, 40–41, 43–46, 55–56, 96, 133, 136–38, 146–47, 150, 152, 156, 171, 180–82, 185, 192, 198–99, 203–5, 208–10, 212–15, 217–19 transfer to households proposal and, 36–37 unemployment targets and, 23, 29, 33, 42, 151–52 Feiveson, Laura, 119–21 Feldstein, Martin

American Economic Association presentation (2009) by, 75 standard regression analysis by, 78–79, 81–82 tax rebate of 2008 analyzed by, 61, 74–84, 90

Wall Street Journal op-ed (2008) by, 74–77, 82 fiat money. See under paper money fiscal stimulus. See standard fiscal stimulus; stimulus without debt proposal Ford, Gerald, 63 Friedman, Milton helicopter money parable of, 34–35, 179–81, 184, 193 portfolio rebalancing effect and, 162 on raises versus tax rebates, 88 functional finance, 14

Gorodnichenko, Yuriy, 115–16 government bonds. See also government debt accounting rules regarding Federal

Reserve holding of, 19–20, 33, 38–39, 41, 143, 190

“bond-burning plan” and, 39–40 portfolio balancing effect linked to

Federal Reserve purchases of, 157–58, 161–63 sellers’ motivations and, 12–13, 30 tax rebates compared to Federal

Reserve purchasing of, 29–30 government debt anxieties regarding standard fiscal stimulus and, 2–3, 20, 30–32, 54–55, 171, 211, 218

Blanchard’s warnings regarding, 31

Federal Reserve-held Treasury bonds and, 19–20, 33, 38–39, 41, 143, 190 interest rates and, 3, 20, 213 investor confidence and, 3, 20–21, 31, 213 negative economic consequences of, 3, 20–21, 31–32, 213 paper money contrasted with, 7–8, 19–20

Reinhart and Rogoff’s warnings regarding, 31–32 standard fiscal stimulus and, 2–3, 18–19, 29–30, 33 Great Depression asset price decline during, 167 household debt levels preceding, 36, 164 interest rate cuts and, 47, 172 Great Recession (2008–10). See also American Recovery and

Reinvestment Act

Blinder and Zandi’s analysis of, 169–71

Congress and, 52, 54–55 consumer demand and consumer confidence during, 17–18, 53, 78, 80, 82, 167 credit liquidity and, 28, 168 federal deficit and, 153, 155–56

Federal Reserve’s role in recovery from, 153, 155, 158, 168–69, 185 household debt levels preceding, 36, 159, 163–66 housing bubble and, 17, 28, 48, 78, 80, 158, 165 interest rate cuts during, 28, 158, 172

Keynesian models and, 170

Lehman Brothers collapse (2008) and, 17, 28, 52, 107, 165

Meltzer on, 153–56 monetary stimulus and, 51, 130, 155–56, 158–59, 170–72, 185 recommendations regarding fiscal stimulus following, 54–55, 133–34 rescue of financial firms and, 28, 52, 158, 168 secular stagnation and the slow recovery from, 196 standard fiscal stimulus and, 2, 31, 49, 51–53, 88, 116–17, 170–71, 185, 196 stimulus without debt proposal and, 27, 32, 54–55, 133–34, 136, 156, 171–72 stock market declines and, 78, 80, 82 subprime mortgage crisis and, 78 tax rebate proposals and, 54, 171 unemployment and, 2, 52–55, 108, 130–31, 158–59, 162–63, 170–71 Greenspan, Alan, 144, 154–55

Hansen, Alvin, 196 helicopter money

Bernanke and, 184, 193

Buiter on irredeemable nature of fiat money and, 192 consumer demand and, 192, 194

Draghi and, 193

Friedman’s parable of, 34–35, 179–81, 184, 193 full-employment economies and, 35, 179–81 inflation and, 35, 180, 191

Lonergan on the European Central

Bank and, 176–77 monetary stimulus and, 181 stimulus without debt compared to, 34–35, 180–81, 190

Wren-Lewis on, 190–91 Herndon, Thomas, 32 Hicks, John, 48 “High Debt, Default Risk, and Vicious

Cycles” (Blanchard), 31 Hodgson, Graham, 143 “Household Expenditure and the Income Tax Rebates of 2001” (Johnson, Parker, and

Souleles), 70–72 House of Debt (Mian and Sufi), 163 “How about Quantitative Easing for the

People?” (Kaletsky), 189

“The Inadequacies of Monetary

Control of the Business Cycle” (Samuelson), 47 “In a Recession, Think Tax Rebates,

Not Across-the-Board Cuts in

Taxes” (Seidman), 63 inflation

American Recovery and

Reinvestment Act and, 130–31 consumer demand and, 10, 127–30, 135–36 definition of, 127

Federal Reserve’s mandate regarding, 23, 29, 33, 42, 151–55 full employment economies and, 10, 14–15, 127–29, 135 helicopter money and, 35, 180, 191 interest rates and, 132, 135, 154, 156 paper money and, 10, 14, 141, 143–44 in recessionary economies, 127–32 stimulus without debt proposal and, 5, 13, 40–41, 127–36, 180, 191, 209–10, 212, 216–17 infrastructure repairs, 102, 126, 216 Inman, Robert, 121–22 interest rates bank reserve requirements and, 135 consumer demand and, 28, 36, 47–48

Federal Reserve’s authority to set, 27–28, 42, 47–48, 135, 151–52 government debt and, 3, 20, 213

Great Depression and, 47, 172

Great Recession and, 28, 158, 172 inflation and, 132, 135, 154, 156 monetary stimulus through lowering of, 1, 13–14, 18, 21, 27–29, 31, 36, 47–50, 76, 151–52, 158–63, 166–72, 197, 217 quantitative easing and, 36 retirees and, 161 small business survey data regarding, 50

Taylor rule and, 155 International Accounting Standards (IAS), 143 International Financial Reporting

Standards (IFRS), 143 International Revenue Service (IRS), 36, 73, 93–94

Japan central bank in, 184–85 government spending during recession in, 167

Mankiw on, 188 public debt in, 167 real estate market decline (1990s) in, 166–67 recession (1990s) in, 166–67, 183–84, 188, 193 Johnson, David tax rebate of 2001 analyzed by, 58, 60, 62, 69–72, 85, 95 tax rebate of 2008 analyzed by, 58, 62, 84–86

Kaletsky, Anatole, 189 Keynes, John Maynard, 13–14, 48, 196 Klein, Lawrence, 48 Koo, Richard, 166–68 Krugman, Paul, 48

Larrain, Felipe, 140–42 “Legal Helicopter Drops in the

Eurozone” (Lonergan), 176 Lehman Brothers collapse (2008), 17, 28, 52, 107, 165 Lerner, Abba, 13–14, 212 Lewis, Kenneth plausible economic model testing of stimulus without debt and, 200 tax rebate of 2001 analyzed by, 67, 79 tax rebate of 2008 analyzed by, 61, 79–82 Liscow, Zachary, 119–21 Lonergan, Eric, 176–77, 189–90

Making Work Pay credits (2009–11)

Republican Party’s push to eliminate, 92, 105

size of, 62, 89, 104 taxpayers’ awareness of, 91, 110 tax withholding reduction mechanism for, 62, 84, 89–92, 104, 110 Mankiw, N. Gregory, 188–89 marginal propensity to consume (MPC), 67–69, 81–83, 94 McClelland, Brendan, 58, 62, 84–86 Medicaid, 99, 109–10, 119–21 Medicare, 93 Meltzer, Alan, 153–56 “Memo to Tokyo: Cut Taxes, Print

Money” (Mankiw), 188 Mian, Atif, 49–50, 163–66 Miran, Stephen, 81 Modigliani, Franco, 48, 88, 162 monetary stimulus balance-sheet recessions and, 166–69

Friedman’s helicopter parable and, 181 government debt and, 19, 190

Great Recession (2008–10) and, 51, 130, 155–56, 158–59, 170–72, 185 inflation and, 192 interest rate cuts and, 1, 13–14, 18, 21, 27–29, 31, 36, 47–50, 76, 151–52, 158–63, 166–72, 197, 217 in Japan (1990s), 184

Keynesianism and, 48 limits of, 1, 13–14, 18, 28–29, 31, 36, 47–50, 76, 157, 159–61, 163, 166–69, 172, 185, 193, 197, 217

New Classical economists and, 49, 160

New Keynesianism and, 49, 160 phasing out of, 23 private debt and, 21 quantitative easing and, 36

monetary stimulus (cont.) quantity theory of money and, 48 recessions addressed through, 1, 51, 130, 155–72, 185 tax rebates compared to, 50, 76, 161

Taylor rule and, 155, 202, 205, 208–10 monetization of debt, 33, 35, 191 Money-Financed Fiscal Program (MFFP, Bernanke), 185–87 “Money from Heaven” (Economist article), 193 mortgage-backed securities (MBSs), 134, 162 Moser-Boehm, Paul, 145 Muellbauer, John, 175–77 multiplier effect of stimulus programs definition of, 113

Keynesianism and, 116–17 mistakes in estimating, 97, 112–17 recession economies versus full-employment economies and, 113–16 tax rebates and, 51 unemployment levels and, 115

World War II and, 115

National Federation of Independent

Businesses (NFIB), 49–50, 166 New Classical economists, 49, 88, 116, 160 New Keynesian economists, 49, 88, 116–17, 160–61

Obama, Barack

American Jobs Act proposal (2011) and, 110–11

American Recovery and

Reinvestment Act and, 107, 109–10

Making Work Pay Credit and, 92, 103

temporary payroll tax cut (2010–13) and, 53 Olney, Martha, 164 Open Market Committee. See under

Federal Reserve “Out of Ammo?” (Economist article), 193

paper money

Federal Reserve’s holding of, 15, 23, 29, 41–43, 45, 137–40, 143–44, 146–49, 214, 217 as “fiat money,” 140–44, 192 government accounting rules regarding, 3–4, 8–10, 12, 19, 137–43, 146–48, 192, 212, 217 government debt contrasted with, 7–8, 19–20 inflation and, 10, 14, 141, 143–44 lack of guarantees for, 4, 8–10, 19, 139–42, 192, 212 previous gold guarantee for, 4, 8–9, 19, 140–42, 144 tax rebates as means of providing, 11–12 Parker, Jonathan tax rebate of 2001 analyzed by, 58, 62, 69–72, 85, 95 tax rebate of 2008 analyzed by, 58–59, 62, 84–87 tax rebate research of, 87–89 payroll taxes employer payroll taxes and, 94

Medicare payroll tax and, 93 recommendations against temporary cuts to, 104–5, 126, 216 regressive nature of, 93

Social Security Trust Fund and, 62, 92, 105 temporary cut (2011–12) to, 62, 84, 92–93, 105, 110 Pelosi, Nancy, 72 Pollin, Robert, 32

portfolio rebalancing effect, 157–58, 161–63 “Print Less but Transfer More” (Blyth and Lonergan), 189–90

quantitative easing (QE), 35–36, 170–71, 189, 194. See also

Federal Reserve: government bond purchases by quantity theory of money, 48

Reagan, Ronald, 63 recession of 1990, 88 recession of 2001, 63, 100, 107 recessions. See also Great Recession (2008–10) balance-sheet recessions and, 166–69 benevolent rulers’ approach to combating, 7, 10–14, 16 consumer confidence and, 23–24 consumer demand decline and, 1, 5, 10–11, 13–14, 25, 38, 159, 164, 219 credit liquidity and, 5, 27 financial crises and, 168 household debt and, 164 housing market declines and, 23, 166 in Japan (1990s), 166–67, 183–84, 188, 193 monetary stimulus and, 1, 51, 130, 155–72, 185 stock market declines and, 21, 23, 166 tax rebates as means of addressing, 4, 25–26, 33, 59, 95, 97, 103 tax revenue declines during, 2, 98, 119, 153 Reinhart, Carmen, 31–32 Republican Party

American Recovery and

Reinvestment Act opposed by, 53, 84, 89, 103, 107, 112 economic stimulus debates in

Congress (2009–10) and, 46 election of 2010 and, 110 long-term tax cuts supported by, 106

Making Work Pay Credit and, 92, 105 payroll tax cut (2011–13) and, 92 spending on long-term programs opposed by, 106 Ricardian equivalence, 89 Rogoff, Kenneth, 31–32 Romer, Christina, 78

Sachs, Jeffrey, 140–42 Sahm, Claudia, 61, 83–84, 90 sales taxes, 93–94 Samuelson, Paul, 47–48, 160 secular stagnation chronically insufficient demand as a cause of, 195–99, 217 introduction of the term, 196 slow growth in potential output as cause of, 195, 198–99 stimulus without debt proposal and, 24, 195–99, 217–18 Seidman, Laurence on accounting rules regarding

Federal Reserve-held government bonds, 38–39

Great Recession stimulus recommendation by, 108

Making Work Pay credit analyzed by, 90 plausible economic model testing of stimulus without debt and, 200

“Stimulus without Debt” article (2013) by, 32–33, 182 tax rebate of 2001 analyzed by, 67–68, 79 tax rebate of 2008 analyzed by, 61, 79–82 tax rebate proposal for 2001 by, 63

Shapiro, Matthew

American Economic Conference presentation (2009) by, 83 tax rebate of 2001 analyzed by, 60, 65–72 tax rebate of 2008 analyzed by, 61, 74, 83–84 Shiller, Robert J., 48 Siegel, Jeremy, 135 “The Simple Analytics of Helicopter

Money” (Buiter), 192 Slemrod, Joel

American Economic Conference presentation (2009) by, 83 tax rebate of 2001 analyzed by, 60, 65–72 tax rebate of 2008 analyzed by, 61, 74, 83–84 Solow, Robert, 48 Souleles, Nicholas tax rebate of 2001 analyzed by, 58, 60, 62, 69–72, 85, 95 tax rebate of 2008 analyzed by, 58, 62, 84–86 standard fiscal stimulus assumptions regarding bank lending and, 49–50

Congress and, 2–4, 20, 185, 197, 211 consumer demand and, 5, 18 effectiveness of, 1, 4–5, 169–72 federal deficit and, 197, 199, 210–11 government bond purchases and government debt increases in, 2–3, 15, 18–19, 29–30, 33 government spending and, 1, 18, 32, 56 grants to state governments and, 1, 4, 56–57

Great Recession and, 2, 31, 49, 51–53, 88, 116–17, 170–71, 185, 196 inflation and, 192 in Japan, 183–84

Keynesian perspectives on, 88 monetization of debt and, 33, 35, 191

New Classical economists perspectives on, 88, 160

New Keynesian perspectives on, 88, 160–61 stimulus without debt compared to, 18–20, 29–30, 32–33, 35 tax cuts and, 1, 56 tax rebates and, 1, 4–5, 11, 18, 21, 25, 32, 181

Taylor’s criticism of, 122–23, 125 Stiglitz, Joseph, 48 “Stimulus without Debt” (2013 journal article by Seidman), 32–33, 182 “Stimulus without Debt in a

Severe Recession” (Lewis and

Seidman), 200 stimulus without debt proposal

Bernanke’s proposal regarding, 185–88

“bond burning” proposal contrasted with, 39–40

Congress and, 5–6, 15, 18, 21–23, 27, 29, 32–34, 37–38, 40, 44–45, 147, 150, 186–87, 190, 192, 214–15, 218–19 consumer confidence and, 12–13, 23–24, 41 consumer demand and, 17, 23–24 in countries other than the United

States, 173–78, 217 economy below full employment as a stipulation for, 10, 12–16, 35, 41, 129–30, 180

Eurozone countries and, 174–78, 217 federal grants to state governments and, 38, 46

Federal Reserve balance sheets and, 23, 41–42, 137–39, 143–44, 146–49, 217 Federal Reserve independence and, 42–43, 150–56, 186–87, 217 Federal Reserve transfers to households compared to, 36–37, 187–90 Federal Reserve transfers to the

Treasury under, 3, 5–6, 11–12, 15, 17–18, 21–22, 26–27, 29, 32–35, 37, 40–41, 43–46, 55–56, 96, 133, 136–38, 146–47, 150, 152, 156, 171, 180–82, 185, 192, 198–99, 203–5, 208–10, 212–15, 217–19 government deficits and, 55–57, 185–86, 199 government spending and, 13–14, 21, 23, 33 Great Recession (2008–10) and, 27, 32, 54–55, 133–34, 136, 156, 171–72 growth rate of potential output and, 51 helicopter money compared to, 34–35, 180–81, 190 inflation and, 5, 13, 40–41, 127–36, 180, 191, 209–10, 212, 216–17 monetization of debt compared to, 35 phase-out period and, 3, 13, 23–24, 41, 127, 129–31, 133–36, 212, 216–17 plausible macroeconomic model testing of, 200–210 potential court challenges regarding, 44 president’s role in, 15, 33–34 private debt and, 21 quantitative easing compared to, 35–36

secular stagnation and, 24, 195–99, 217–18 separation of powers in, 15, 22, 33–35, 37–38, 176, 180, 187–88, 192, 214–15 standard fiscal stimulus compared to, 18–20, 29–30, 32–33, 35 tax increases following, 13, 23 tax rebates and, 5–6, 12, 16, 21–24, 26–27, 29, 33–34, 36, 46, 138, 188, 198, 214–15 temporary nature of, 23–24 temporary tax incentives for business investment and, 21, 38, 46 unemployment and, 14, 16, 181 Sufi, Amir, 49–50, 163–66 Summers, Lawrence, 196–97 supply-side economics, 63

tax cuts of 2001, 107 tax rebate of 1975, 38, 63 tax rebate of 2001 amounts dispersed to households in, 64, 74

Congress and, 38, 63–64 consumer spending and, 58–60, 62, 65–72, 85

Democratic Party opposition to elements of, 63 disbursement schedule for, 59, 64–65, 67, 69–70, 74, 79, 88 economy’s performance following, 65

Johnson on, 58, 60, 62, 69–72, 85, 95

Lewis on, 67, 79 paper check format of, 59–60, 64–65, 70, 74, 90, 92, 104

Parker on, 58, 62, 69–72, 85, 95 presidential election of 2000 and, 63 recession of 2001 and, 63

tax rebate of (cont.)

Seidman on, 67–68, 79

Shapiro on, 60, 65–72

Slemrod on, 60, 65–72

Souleles on, 58, 60, 62, 69–72, 85, 95 tax rate cuts accompanying, 64 tax rebate of 2008 bipartisan support for, 45–46

Broda on, 58–59, 62, 86–87, 95

Congress and, 37 consumer spending and, 58–59, 61–62, 75–87, 90 disbursement schedule for, 59–60, 73–74, 79, 85, 88 electronic fund transfers (EFTs) and, 73, 91–92, 104

Feldstein on, 61, 74–84, 90

Great Recession and, 33, 72 housing bubble and, 72, 78, 80

Johnson on, 58, 62, 84–86

Lewis on, 61, 79–82

McClelland on, 58, 62, 84–86 paper checks and, 73–74, 89–90, 92, 104

Parker on, 58–59, 62, 84–87

Sahm on, 61, 83–84, 90

Seidman on, 61, 79–82

Shapiro on, 61, 74, 83–84 size of, 72–73, 85, 93, 106

Slemrod on, 61, 74, 83–84

Souleles on, 58, 62, 84–86 subprime mortgage crisis and, 78

Taylor on, 61, 74–84, 90 tax rebates. See also tax rebate of 2001; tax rebate of 2008 bipartisan support for, 26, 216

Congress and, 4, 18, 22, 25, 29, 37–38, 46, 63–64, 90, 96, 182–83 consumer spending and consumer demand impacted by, 11–12, 21, 24–25, 30, 50, 58–62, 65–72, 75–91, 95, 100, 171, 192, 215 cutting withholding of taxes compared to, 89–93 effectiveness of, 4–6, 25, 58–96, 215

Federal Reserve purchase of government bonds compared to, 29–30 government spending following, 13, 23 long-term spending increases compared to, 25–26, 103 long-term tax cuts compared to, 25–26, 103, 106 paper money provided through, 11–12 raises from employers compared to, 88 recommendations regarding size of, 54 recommended future designs for, 93–96 standard fiscal stimulus and, 1, 4–5, 11, 18, 21, 25, 32, 181 standard monetary stimulus compared to, 50, 76, 161 stimulus without debt proposal and, 5–6, 12, 16, 21–24, 26–27, 29, 33–34, 36, 46, 138, 188, 198, 214–15 tax increases following, 13, 23 temporary nature of, 25–26, 215–16

Treasury and, 4 Tax Reduction Act of 1975, 63 tax withholding

Making Work Pay credits via reductions in, 62, 84, 89–92, 104, 110 recommendations against temporary cuts to, 103–4, 126, 216 taxpayers’ awareness of small changes to, 91 tax rebates compared to, 89–93

Taylor, John

American Economic Association presentation (2009) by, 75 standard fiscal stimulus during recessions critiqued by, 122–23, 125 standard regression analysis by, 78–79, 81–82 tax rebate of 2008 analyzed by, 61, 74–84, 90

Taylor rule and, 155, 202, 205, 208–10

Wall Street Journal op-ed (2008) by, 74–75, 77–78, 82 Temin, Peter, 164 temporary tax incentives for business investment bonus depreciation provisions and, 100–101 business pressure to establish permanence of, 101

Economic Stimulus Act of 2008 and, 101 investment tax credits and, 100 stimulative effect of, 100–101, 126, 216 stimulus without debt proposal and, 21, 38, 46 Tinbergen, Jan, 48 Tobin, James, 48, 162 Treasury of the United States

“bond-burning” plan and, 39–40 bond payment obligations and, 39 credit liquidity and, 5 rescue of financial firms and, 28, 158, 219 standard fiscal stimulus and, 18

tax rebates and, 4 transfers from Federal Reserve under stimulus without debt plan and, 3, 5–6, 11–12, 15, 17–18, 21–22, 26–27, 29, 32–35, 37, 40–41, 43–46, 55–56, 96, 133, 136–38, 146–47, 150, 152, 156, 171, 180–82, 185, 192, 198–99, 203–5, 208–10, 212–15, 217–19 Turner, Adair, 183

unemployment

American Recovery and

Reinvestment Act (2009) and, 52–53, 108, 111, 118–21

Federal Reserve’s mandate regarding, 23, 29, 33, 42, 151–52

Great Recession and, 2, 52–55, 108, 130–31, 158–59, 162–63, 170–71 stimulus without debt proposal and, 14, 16, 181

Volcker, Paul, 154 “Voodoo Multipliers” (Barro), 115

Whelan, Karl, 142 Wilson, Daniel, 117–21 Wood, Richard, 191 Woodford, Michael, 191 Woolston, William Gui, 119–21 Wren-Lewis, Simon, 190–91

Zandi, Mark, 169–71