USA TODAY: … Economists who think unemployment is based on cyclical factors, such as the housing bust, believe government can stimulate job growth by jump-starting sluggish sectors. [Peter] Diamond said Monday he supports another federal stimulus package.
“Further moves by the federal government to help state and local governments keep up employment of teachers, police officers, fire officials and social workers would be valuable,” he said….
[Dale] Mortensen, meanwhile, spoke of the limits of government policy. He didn’t address another stimulus but suggested an anticipated plan by the Fed to buy more Treasury bonds to lower interest rates might be off the mark: “You can’t simply solve this … by manipulating interest rates. It’s a complicated” task involving “confidence-building.” … (more)
