Rising deficits and a global economic slowdown, coupled with a financial market meltdown, have put into question the effectiveness of policy, both fiscal and monetary. With Hayekians bashing Keynesians for excessive spending and demanding deep budget cuts, the Levy Forecasting Center?s head researcher explains how QE2?s failure to spark a ?wealth effect? delivered its own failure, and why there will be a double-dip recession given a lack of efficiently allocated fiscal stimulus. Gold?s skyrocketing price is a reflection of a ?loss of confidence in the economy?s ability to produce goods and services,? says the economist.
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