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I am not aware of any body of literature in macroeconomics -- orthodox, heterodox, whatever -- that would justify such a claim.

The justification was likely Obama's compulsion to engage in preemptive concessions which yield him nothing - unless he really is a right wing mole. Richard Koo clearly demonstrated the cost of NOT providing sufficient counter-cyclical spending in The World in Balance Sheet Recession (PDF) with the case of Japan post '89. Where the Government fails to use fiscal policy to make up the lost production the society suffers a permanent loss of the work that could have been done and adds debt that does not result in an increased ability to repay that debt. Wise fiscal policy creates a self liquidating debt. US policy is, of course, "All Money To The Banks!" - the perfect Capitalist translation of "All Power to the Soviets!".

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Jul 27th, 2013 at 03:05:22 PM EST

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