What will be the new policy mistakes between now and the end of the year? It seems like the most likely will be to believe that the recovery will be strong so we can reverse some of the monetary and fiscal stimulus. G20 countries want to discuss the reversal of the monetary easing in September so this will be top of any discussion. Second, will be policies to offset the current fiscal stimulus. This change may not be a outright reversal of stimulus policies, but a change in tax policies based on "prudent" debt management. The talk of raising taxes to pay for the current debt is increasing but is certainly premature. The other fiscal mistake is the belief that rules are costless and that now is the time to change the regulatory environment. The added uncertainty with some new regulations may retard growth. Let's learn first and change the rules second.
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