I worry about the substance of this argument. I agree that these differing opinions lead to disparate avocations which lose Contact with each other. On the other side, Brian Riedl and John Cochrane own somewhat of a Point. The existence of a central bank willing to create from nothing makes it impossible to propel any crowding out effect in the Money supply. There can be a very real statement, though, that Employment is respondent to two factors: the Profitability per Item of Production, and the Productivity level of labor. There is a very real argument that Business will not Hire unless Productivity has a certain magnitude, and that Stimulus expenditure manages to exceed a certain level of Profitability per Item. There must also be a very real level of Production per labor force size to accept the total Wage Costs of maintaining a heavy employment structure.
There is not only a limit to Stimulus, past which no benefit will be found; there is also a limit to Tax Cuts past which no increase of employment will be envisioned. Before anyone discusses any projected Stimulus or Tax Cut, one should quantify the current Private sector level of Consumption, and estimate How much of that Consumption is already fulfilled by the current level of employment. It is foolish to add Cash to either Stimulus or Tax Cuts if Consumption needs are already being met for the level of Consumption. I would like to tell the Author of the argument that a real valid thesis can be made where it is impossible for Government to create any greater level of Employment, though he thinks it lacks weight.
I do not advocate any Stimulus measures which do not have an underpinning of increased Consumption by some segment of the economy. I will not advocate any Tax Cut which is not coupled with some form of Consumption incentive; I personally like a codicil to current Tax Cuts stating that such Tax Cuts cannot be obtained, unless and until the Taxpaying Business prove a reduction in Retail pricing for its Product during the Tax year. Conservatives will automatically say that I am advocating a Tax increase, which is not necessarily true; but what is true consists of a real desire to increase Tax revenues, especially from Business and industry which shows little response to declining Consumption of their Product lines. I mentioned earlier in previous Posts that I hoped this was the Year of Great Sales. I still do, thinking that these Sales will be the only method to increase Consumption–the prerequisite to higher employment. lgl