Avinash Dixit:
The lesson that really should be learned, and I’m
afraid will never be learned, is that the time for fiscal prudence is when
times are good. That’s when governments should be running substantial
surpluses, so that when crises or a recession hit, they can spend freely
without worrying about debt.
Unfortunately, the reason the lesson will never be
learned is that good economic times are especially conducive to the illusion
that bad times will never return.