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Friday, July 25, 2003
Second Verse, Same as the First

Paul Krugman, in the Times, fears that something has gone wrong with Greenspan:

As far as I can make out, Mr. Greenspan's optimism is entirely based on models predicting that tax cuts and low interest rates will get the economy moving. But that's what the models said last year, too: the report that accompanied his July 2002 testimony predicted an unemployment rate of 5.25 to 5.5 percent by late 2003 (the rate is now 6.4 percent). Maybe tax cuts mainly for the affluent aren't as effective as the models say.

As usual, the whole piece is worth a read.

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