In a full-page ad published in major newspapers Jan. 29, more than 200 economists — including two from Washington University in St. Louis — politely reject President Obama's stimulus package calling for increased government action to jumpstart the economy.
WUSTL economists Michele Boldrin and David Levine signed the statement in the ad paid for by the Cato Institute and are available for interview.
While objecting to increased government spending, the economists recommend that policy makers "focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth."
Michele Boldrin, chair of the WUSTL economics department adds that the bank bailout "is clearly failing its main goal of preventing a credit crunch while increasing the opaqueness of the financial sector."
Boldrin says a rehaul of the financial sector is urgent. Instead of injecting cash into large U.S. banks, Boldrin calls on the government to reform the regulation process and re-establish "transparency and accountability in the sector."