We’re not talking about stupid people here; clearly, there’s something about the notion that the rules for policy depend on the situation that some economists just don’t want to understand.
Anyway, my own answer is still what it has been all along: the time for austerity is when the economy is close enough to full employment that the Fed is starting to raise rates to head off an undesirably high rate of inflation; at this point, given the case for somewhat higher inflation, I’d say that we shouldn’t even think about this until unemployment is well below 7 and falling fast. At that point you can, in effect, make a deal — fiscal austerity in return for not hiking rates — that leaves the economy harmless.
I can understand why politicians have a hard time getting this. But economists have no excuse.
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