Today, NBER President Feldstein says there are three main factors that are likely dragging the economy into a recession: the slump in housing construction, turmoil in financial markets and a drop in home values, which makes people more nervous and less apt to spend.
He argues that the Federal Reserve needs to aggressively cut interest rates, and Congress should enact some form of fiscal stimulus, such as one-time tax rebates for consumers to ease the pain.
“If we don’t have some offsetting policy, and we move into a recession, then I’m afraid the fact that we’ve got all these things hitting at the same time could make it pretty nasty,” [Martin] Feldstein says.
[blockquote]He argues that the Federal Reserve needs to aggressively cut interest rates, and Congress should enact some form of fiscal stimulus, such as one-time tax rebates for consumers to ease the pain.[/blockquote]
Better yet, just print up a zillion $100 bills, load them into the Chinooks, and dump them over the cities.