Columbia International Affairs Online: Policy Briefs

CIAO DATE: 05/2009

Print Money and Cut the Payroll Tax

John H. Makin

December 2008

American Enterprise Institute for Public Policy Research

Abstract

President-elect Barack Obama faces the most difficult economic challenge confronting an incoming American president since the election of Franklin Delano Roosevelt seventy-six years ago in 1932. When he assumes office on January 20, Obama will need to act decisively with heretofore unprecedented fiscal policy steps, in conjunction with measures by the Federal Reserve to increase the money supply and lower long-term interest rates. All of this must be done to help contain and reverse the accelerating global slowdown by halting the rapidly deepening American recession. We can only hope that other national leaders and central banks will follow suit.