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Is it now inevitable, or even very likely, that the Obama administration would act to acquire a controlling ownership of major U.S. banks to help revive the credit markets? Would it work? Is it even practical to think about nationalizing most of the banking sector, as Sweden did in the early 1990s? How might the government decide how banks would lend money? If the credit freeze continues, are there alternatives to nationalization?
-- John Maggs, NationalJournal.com
3 responses: James K. Galbraith, Grover Norquist, J.D. Foster
Desmond Lachman wonders whether the risk of deflation is now great enough that a change in Fed policy is warranted. Quantitative easing, such as last month's rate cut, some believe, has been limited in effect and may be approaching its limits. Should the Fed consider an explicit inflation target, and perhaps also consider buying inflation-indexed bonds as a way of signaling its determination to avoid a Japanese-style deflation?
-- John Maggs, NationalJournal.com
4 responses: Grover Norquist, Jeffrey Frankel, Adam Posen, Desmond Lachman
Is job creation the best way to measure whether the Obama administration's economic plan is working? Obama has promised to create "or save" at least 3 million jobs by 2011, but an analysis [PDF] by the Obama team estimates job losses of 3 to 4 million without action. Does that commit Obama to roughly reaching current levels of employment by 2011? Is the analysis correct to estimate 3.7% GDP growth from his $775 billion plan? Is the analysis, by Christina Romer and Jared Bernstein, reasonable in its estimates of the growth effects of spending, versus tax cuts and other options?
-- John Maggs, NationalJournal.com
What is your favorite idea for economic stimulus that is not getting the attention it should? How do you assess the Obama approach, as reported? Is his idea of a two-year tax credit for most workers sound, considering the failure of the 2008 rebate to stimulate spending?
-- John Maggs, NationalJournal.com
12 responses: John Berlau, Mark Bloomfield, Gerald Prante, Len Burman, Jeffrey Grogger, Desmond Lachman, J.D. Foster, Isabel Sawhill, John S. Irons, Alan Meltzer, Robert Litan, Gary Burtless
