Sumner Tells Us Where He's Willing to Compromise

     I did find him helpful here at least in knowing where he's coming from.

     "Many commenters ask me why I don’t compromise, and support a “helicopter drop,” which is usually meant as a metaphor for a combined fiscal and monetary stimulus.  One answer is that it may not work, as the Japanese showed between 1997 and 2012.  Another is that it’s wasteful, and that monetary stimulus alone is much more efficient.  But to give a better answer let me list government stabilization policies that might have been adopted in 2008, in order of preference:

1.  NGDPLT.

2.  A 4% inflation target

3.  Monetary stimulus combined with tax cuts that lower inflation (VAT, employer-side payroll taxes.)

4.  Monetary stimulus and more government spending.

5.  Hard money (i.e. tighter than the actual Fed policy post-2008.)

6.  Fiscal stimulus without monetary stimulus.

7.  Statist policies without monetary stimulus (i.e. Syriza policy.)

     "In criticizing policies 2 through 7, I may have fallen short in giving readers a sense of my views as to the lesser of evils.  If you pair any two items and convince me that they are the only two feasible alternatives, then this list tells you which one I will “support.”  But of course bloggers have to be careful, as when this information gets passed down the line, it gradually morphs from “Sumner considers X less bad than Y” to “Sumner supports X.” 

     http://www.themoneyillusion.com/?p=28580&cpage=2#comment-378694

     As a liberal and Keynesian of sorts I could definitely live with anything between 1 and 4.  I would be fine with say 1 or 2 with more govt spending or a tax cut stimulus. I don't see a tax cut stimulus as optimum-though it depends how the cut is targeted- but I would certainly take it over no stimulus. 

    I don't get why 5 is preferable to 6 and I couldn't get an answer out of Sumner in the comments. section. Don't get me wrong I made the cardinal mistake of asking him 2 questions. If you want 1 question answered by him it's best to ask just 1. At least with me, I can hope to get maybe 1 decent response from him. 

    I got sidetracked by something his benefactor, Kevin Duda-who's now financing his research said. Duda seems fair to me here:

   "Britonomist: I agree completely. Keynesians and Market Monetarists should get together and agree that the best practical approach is two things:

    "1. NGDPLT"

    "2. Fiscal stimulus when NGDP is under target"

    Sumner seemed to me to not like that trade so I also asked about that. Of course, this meant he answered this but not my question on why 6 is preferable to 5-why would you prefer tight money and a deeper recession to a less deep recession with the possibility of 'distortionary taxes' in the future?

    I mean what can be worse distortionary taxes or a deep recession? Anyway I very much doubt he and I would agree on what's distortionary taxes in any case. I'm a skeptic of Ricardian Equivalence in any case, though I know that RI is widely believed in the economist mainstream-the fact that most economists believe something doesn't mean I have to. Krugman believes in some level of RI but less drastic than Sumner.

    Paraphrasing a great line of Michael Kinsley I always be grateful for-'if democracy can good so can economists.' 

    Note: His actual line was 'Democracy can goof' as he said after the election of the first Bush over Dukakis in 1988. 

   What a Sumner will call distortionary taxes, a liberal like me will call progressive taxes. Liberals and Supply Siders rarely agree here.  Note that he prefers an employment side over employee side payroll tax cut. He does answer my question about that by claiming that the advantage of the employer side rather than employee side tax cut is that the former won't be offset by the Fed. 

     As his post is kind of a cautionary note to bloggers who say he supports something that he merely considers a lesser of 2 evils-I'm so vain that I wonder if I could be 1 of those bloggers he has in mind!-this was helpful. I have lately taken to calling him austerity's biggest advocate. 

    I say that as he criticizes any criticism of austerity-it amounts to the same thing. Even in lieu of this list, I'm not clear that austerity in his mind is in anyway a lesser of 2 evils. 

    I mean assuming the Fed does 1 wouldn't he prefer the fiscal authorities do fiscal contraction rather than leaving spending at the same level as the previous year?

     I don't know that austerity is in any way an evil for him no matter what the choices. 

    P.S. I know that if I of all people-Sumner and I aren't exactly busom buddies-want to get an answer to a question from him, I need to prioritize. So if I want to ask him questions A, B, and C, I should first figure out which question I care most about and ask that first-without the other 2. Only when I'm happy with the answer should I even think of broaching the other 2-again I would have to prioritize the second  most important; realistically I doubt Sumner and I will get that far very often. 

   P.S.S. Finally I'd like to make a clarion call to Nick Rowe. As I wasn't able to get an answer as to why 6 if preferable to 5 maybe Nick can take a stab?

   I'm also not sure what the difference between options 7 and 8 are.