The Wall Street Journal’s Real Time Economics/Secondary Sources today juxtaposes:
1. Peer Steinbruck, the German Minister of Finance, saying that Germany will not engage in “extensive debt financed-spending or tax-reduction programs.”
2. My posting, from yesterday, which makes the point that a big fiscal stimulus in the US strengthens the incentive for our major trading partners to free ride, i.e., not to engage in their own extensive debt financed-spending or tax-reduction programs.
Looks like we are still on at least this part of our baseline.
The Baseline Scenario 