The prevalent theme in recent discussions of stimulus is that the risk of doing too little exceeds the risk that we shall do too much. But we must ask how much of too much we can tolerate. The risks of overdoing it are severe and are not emphasized enough in the current discussion. The main worries are that the speed with which the national debt is being increased could eventually cause a very rapid rise in interest rates on Treasuries and that federal, state and local bureaucracies may not be able to manage the proposed huge increase in spending. Turning to the long run, the testimony discusses the need to address short- and long-term budget problems simultaneously and the prospects for using the Conrad-Gregg commission to do so.
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