Would a recession really be all that bad?
Is it worth abandoning fiscal and monetary policy responsibility?
Generals have a habit of fighting the last war and we all have short memories. Because of that, when people hear the word 'recession' they think back to 2009 and the extreme pain of that time.
That wasn't a recession, it was a once-in-a-lifetime financial crisis.
A vanilla recession really isn't that bad. Yes, it will mean layoffs and a weak market but there's a cleansing aspect to a recession. Like Warren Buffett said, 'You only find out who is swimming naked when the tide goes out.'
The very heart of capitalism is creative destruction.
It's unpleasant but it's better to know which companies don't have a viable business model, so someone else can fill in.
Naturally, it's better to avoid a recession than not but if the cost of avoiding one includes: 1) sub-zero rates 2) more QE 3) larger deficits
Then maybe the risks outweigh the rewards? Eventually there will be costs to those programs I think the costs are greater than suffering a 1 percentage point decline in GDP over a few quarters.