Robert Shiller on the Need for More Stimulus

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Earlier this month, we asked Fools if they thought more stimulus would help or hinder the economy. Twenty percent said it would help. More than half said it would hinder (the rest were unsure).

The question has been a hot topic since 2008 and 2009, when the federal government bailed out large banks such as Bank of America and Goldman Sachs, and followed up with one of the largest stimulus packages of all time.

The problem when gauging whether the stimulus packages worked is that we don't know what would have happened in their absence. It's easy to say the 2009 stimulus package failed because unemployment went on to top 10%. But the real question is whether it would have been much higher -- 15% or 20% -- without stimulus. And that, we just don't know.                   

In an exclusive recent interview, I asked Yale economist Robert Shiller about recessions, austerity, and stimulus. Here's what he had to say:

What do you think? Share your thoughts below.

At the time this article was published Fool contributorMorgan Houselowns B of A preferred. Follow him on Twitter @TMFHousel.The Motley Fool owns shares of Bank of America. Motley Fool newsletter services have recommended buying shares of The Goldman Sachs Group. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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