Obama’s press conference wasn’t as bad as it could have been; he actually more or less said that stimulus should be sustained, except it isn’t politically possible. But he also invoked the confidence fairy – and introduced another fallacy, showing that he and his advisers still don’t get the essence of macroeconomics in a liquidity trap:I do think that if the country as a whole sees Washington act responsibly, compromises being made, the deficit and debt being dealt with for 10, 15, 20 years, that that will help with businesses feeling more confident about aggressively investing in this country, foreign investors saying America has got its act together and are willing to invest. And so it can have a positive impact in overall growth and employment.
Read the rest of this story at The New York Times.
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