Speaking of horrid fiscal policy:
Government jobs are (still) the problem, by Neil Irwin: One of the reasons for quiet optimism about the economy over the last few months has been the possibility that state and local governments have finished their long retrenchment and that government hiring might soon contribute to job creation.
From July 2008 to January 2013, the sector shed more than 737,000 jobs. Had the jobs merely been maintained, the unemployment rate would be as much has half a percentage point lower. Indeed, the state and local pullback is one significant reason that this recovery has been weaker than those in the past. ...