Boston.com has a bulletin on the latest read on the Mass. economy from the MassBenchmarks group of UMass. Our own Prof. Bob is a contributor to this group, wearing his historian home uniform jersey. He should have been mentioned as UMass Lowell’s scholar in the group with the lights from Harvard and MIT.
The economists said the answer to the economy’s struggles isn’t government budget cutting. Instead they called for fiscal stimulus — more federal spending, tax cuts, or both — to help right the economy.
“It is clear that the economy is not going to heal itself, and that fiscal austerity in the short run will only prolong economic suffering,” the summary said. “The economically prudent policy — more fiscal stimulus in the short run coupled with deficit reduction that takes effect as the economy recovers — can be achieved only is we reach political consensus.”
The group — which includes economists from the Federal Reserve Bank of Boston, Boston University, Harvard, and MIT — said interest rate reductions and other steps taken by the Federal Reserve have “reached the limit of their effectiveness,” and called upon federal policy makers to take additional steps.