The Value of Pre-Commitment

We know now as good trained macroeconomists with much more experience, we don't blame the people back then for not knowing this, but what could they do? We know now that the role of the central bank, when there's a crisis, is to flood the market with liquidity. And so, yeah, you don't want to be on a gold standard and have enforced austerity when really what you need is fiscal liberality. If the US government had still been on the gold standard in the fall of 2008, we would have had another second Great Depression. Fortunately, the Fed was able to flood the markets with liquidity, have the QE programs, and that spared us a disaster.