Fiscal adjustment principles: (1) cut enough to solve the problem, (2) cut counter-cyclically (during expansion, not recession), (3) offset with monetary stimulus. Violation of any of these three principles converts adjustment into depression.
Fiscal adjustment principles: (1) cut enough to solve the problem, (2) cut counter-cyclically (during expansion, not recession), (3) offset with monetary stimulus. Violation of any of these three principles converts adjustment into depression.