Bidenomics seeks to lower the curtain on neoliberalism. This column explains key differences between the old and new canon. E.g. Old: scarcity dominates, demand > supply. New: slack dominates, supply > demand... wsj.com/articles/how-b…
2. Old: Don't let fiscal policy push unemployment too low, or inflation will rise. New: unemployment has always been too high. Inflation is a remote risk, and less costly than persistent unemployment.
3. Old: Savings are scarce so deficits crowd out private investment. New: Savings are plentiful so deficits aren't harmful. 4. Old: Transfers should be targeted. New: Transfers should be universal. 5. Old: Incentives matter a lot. New: not really...
Bidenomics draws on evidence that debts, inflation, incentives don't matter as much as we once thought. But in practice seems to have no limiting principle, e.g. if $3T stimulus ok, why not $6T? In practice, it depends critically on Fed keeping rates @ zero.
Addendum: In researching this column I read some of @JWMason1's work and listened to an interview with him on a podcast and found it head-clearing. Recommended.
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