Toward a Welfare State

Raghuram Rajan in his book Fault Lines, which recently won the Financial Times Business Book of the Year, says that in the United States, instead of improving the long-run competitiveness of labour force for a global market with a changing mix of industries and required skills, governments have adopted the short-run option of ‘let them eat credit’ (the title of chapter one). It means that the US government is too ready to stimulate its economy with badly thought-out tax cuts or pork-barrel public spending increases, and to take appallingly stupid risks with monetary policy.