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Important paper by Summers and Rachel 1/ brookings.edu/bpea-articles/…
It's a commonplace these days that major economies seem stuck at or near the effective lower bound for interest rates, leaving little room to fight recessions -- which is what "secular stagnation" really means 2/ 
What Summers and Rachel argue is that this is happening despite fiscal policies that are de facto stimulative -- not so much deficit spending as programs that redistribute from the young to the old, who are more likely to spend. 3/
This means that underlying demand is even weaker than it looks. As a result, fiscal consolidation – including "entitlement reform" – might well be a recipe for frequent bouts of high unemployment 4/
Meanwhile, Romer^2 talk about "fiscal space," but conclude that it's mostly in the mind. Countries with lots of debt tend to practice austerity in the face of slumps, but not because they have too. Arguably, the real problem isn't debt per se 5/
It's fiscal hypochondria. Everybody thinks they're turning into Greece, even when the market says they aren't, and they impose protracted slumps in the name of false notions of responsibility 6/
Aha: forgot the paper like 7/ brookings.edu/bpea-articles/…
