Economist's View
Rubin: Sound Government Finances will Promote Recovery
Mark Thoma | Professor of Economics, University of Oregon
Wednesday, January 8, 2014
Mark Thoma — Rubin: Sound Government Finances will Promote Recovery
Economist's View
Rubin: Sound Government Finances will Promote Recovery
Mark Thoma | Professor of Economics, University of Oregon
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4 comments:
He's suggesting we return to a gold std?
What the heck does "Sound Fiat" even mean?
Kitson lambasted the benefit of "sound public finance" 80+ years ago, and called it what it is ... ruinous.
http://www.youtube.com/watch?v=SI7WRoc56Mw&feature=my_liked_videos&list=LL2xNt9ArEw3qBt-61u0GHFg
Rubin is thinking of the bond market as the arbiter of sound finance, so that a high public debt to GDP ration will drive up interest rates. He is saying that the only reason that rates are (artificially) low now is due to the extraordinary actions of the Fed, which are only temporary. So the country need to reduce the debt to GDP ration so the Fed can taper without driving up long term interest rates.
Rubin is an investment banker and bond guy. He advised Clinton that the most important thing is low long term interest rates since they support higher levels of investment.
How's that worked out?
He thinks it worked out great for Clinton.
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