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To be fair, there are other ways being put forward for raising demand that are more conventional: aggressive public spending for one. But the political prospects for this option to be exercised are not bright. So finally, in the debate, there is a return to an issue that had long disappeared from our horizons: adjustment to the prospect that high unemployment will be the norm rather than the exception. The idea has not gained traction in the US, but it is not an accident that an unconditional basic income is now becoming a live political option in many countries, from Switzerland to the UK. There are many complicated arguments behind this. There is a normative argument that only such an income can produce a society free from exploitation; there is also a practical argument that basic income cash transfers can replace the complex bureaucracy of a welfare state. But there is a new argument that unconditional basic income might, paradoxically, allow for more flexible employment structures, by giving people the option to take supplementary employment rather than a full time job. The whole welfare-employment link will be considered anew.
There are lessons for India. In the short run, we might think that Summers' defence of bubbles is good for emerging markets. But we need to draw long-term lessons. We need to have clarity about how these debates over secular stagnation are likely to turn out. It will affect our growth model. It also is a good mirror to come to terms with what the real drivers of growth are versus what merely appears to induce it. The Washington dissensus should be a spur to thinking. But most importantly, societies have a two to three-decade window of opportunity to improve their wellbeing before larger factors turn against them. We are in that window, and busy squandering it.