Two titans of the economic world, Stanford’s JOHN B. TAYLOR and Harvard’s LARRY SUMMERS, squared off in a debate last week on campus. It was the second debate for them (the first was at Harvard). The Stanford Institute for Economic Policy Research brought the two men together in Cemex Auditorium.
The topic was the ailing economy, and the question was whether government interventions had made things worse. Occasionally, they even agreed, though Summers was more supportive of intervention.
“One of the most difficult things to think about in regards to the crisis is to say things could have been worse – of course they could have been,” said Taylor. “It’s so hard to run through the factual process of interventions – if we hadn’t have caused the damage, we wouldn’t have needed the interventions.”
Summers talked about payroll tax cuts and tax rebates. “For the people in this room, an extra $1,000 means very little,” he said, “But for the vast majority of Americans that is not the case – for those on Social Security or unemployment insurance or those who take their pills every other day because they can’t afford to take them every day – people like that do not save their money: they need it.”
You can watch the debate on video: