Re: Automatic Stabilizers

[Jim Devine <JNDF%LMUACAD.BITNET@xxxxxxxxxxxxxxxxx>]

On Fri, 10 Feb 1995 12:53:02 -0700 <ACSLKS@xxxxxxxxxxxxxxxx> said:
>There has not been much discussion and/or research done on the economy's
>automatic stabilizers for a long time.  With all this flurry over reducing
>taxes and transfers, would this not increase the severity of future
>recessions??  Never heard this discussed on C-SPAN.
>
This is a major issues. As politics seem to be returning to the
style of the 1920s (if not the 19th century), the automatic
stabilizers are probably doing so also. The lack of automatic
stabilization was one structural cause (perhaps minor) in the
origins of the 1930s.

However, what Wallace Peterson terms "the silent depression"
may not intensify (who can predict?)  Instead, we might see
more severe recessions (and steeper booms), as Lonnie suggests.
The resultant insecurity
might keep wages down and promote profitability, a major
goal that both Republicans and Democrats seem to be pursuing
(outside of the realm of rhetoric).


sincerely,

Jim Devine
jndf@xxxxxxxxxxxxxx or jdevine@xxxxxxxxxxxxxxx
Econ. Dept., Loyola Marymount Univ., Los Angeles, CA 90045-2699 USA
310/338-2948 (daytime, during workweek); FAX: 310/338-1950
"One knows so much and comprehends so little." -- Einstein