Professor Cowen suggests that, in practice, fiscal policy is not ideal because:

A. voters typically expect the federal government to balance its budget even during a recession.
B. elected officials have an incentive to raise taxes even when the appropriate fiscal policy response is to cut taxes.
C. the federal government continually has budget deficits rather than having surpluses when the economy is healthy.
D. political infighting makes it unlikely that Congress will ever approve a budget, let alone approve fiscal policy actions.

Ans: C. the federal government continually has budget deficits rather than having surpluses when the economy is healthy.