How to Combat Recession: Stimulus without Debt

Recessions are a recurring phenomenon and there are repeated debates about how to combat them when the crisis hits and after the economy begins to grow again. Laurence Seidman argues that currently we are not ready to combat the next recession.

A recession involves a plunge in aggregate demand for goods and services which compels producers to cut production and employment. Fortunately, a large boost in demand can be achieved by a large fiscal stimulus-primarily a temporary large increase in...