“The only way that we can reduce our financial dependence on the inflow of funds from the rest of the world is to reduce our trade deficit.”
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Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.
First, I think the science of monetary economics has clearly gotten better.
And finally, no matter how good the science gets, there are problems that inevitably depend on judgement, on art, on a feel for financial markets.
A second reason why science cannot replace judgement is the behavior of financial markets.
