For every year of stimulus (which isn’t really stimulus), there is an equal and opposite year of debt payback, writes Neil Emerick
13 August 2020 - 05:00Governments around the world have embarked on the greatest financial experiment of all time. That experiment has been labelled by the media as “stimulus” and involves a mixture of government aid, tax relief, unemployment payments and central bank money manipulation on the grandest scale imaginable.
People look at their governments and second-guess them; people are sneakier than stochastic models allow for Since John Maynard Keynes and his general equilibrium equations, economists have proposed policies that view the economy as some kind of machine with levers. From “ In 1976, Robert Lucas nailed the point home when he showed how basing any economic policy on historic priors was doomed to failure if people could modify the behaviour on which those models were premised. For the most part, the Lucas critique stands unchallenged.
As we know, our more recent stimulus will blow this out of the water. Online dictionaries don’t have a direct antonym for stimulus, but suggestions include deterrent, disincentive, discouragement, depressant.
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