Stimulus Should Not Reinforce Misallocation of Resources

Conn Carroll /

New York University economics professor Mario Rizzo full remarks from last week’s Club for Growth-Heritage Foundation “Economic Recovery: Free Markets vs. Big Government” conference are now available on line. Rizzo summarizes them here:

My four key points are:

1. The central cause of the current economic state of affairs is bad monetary policy from 2002 through early 2006.

2. Stimulus should not stimulate or reinforce the misallocation of resources.

3. Stimulus should create economic value and not destroy it.

4. The best stimulus consists of incentive-relevant tax reductions.