Deficits not the problem, but the solution
Youâ€™d hardly note it above the roaring of the deficit hawks, but a report quietly released Thursday afternoon by the Institute for Americaâ€™s Future argues for increased government spending. Signed by some 300 economists and 40 civic and state leaders, the report says when it comes to reducing the deficit, the key is to focus on what is exacerbating the problem.
So what do they propose for the future? Responsible investment. Robert Borosage, a co-author of the report, told Metro Times via e-mail: â€śPresident Barack Obama has called on us to build a new foundation for the economy. This requires making investments vital to our future â€” in education and training, in research and development, in a modern infrastructure for the 21st century.â€ť
In the end the report describes two paths: one of austere economics that relies on less government spending, which produces a stagnant economy and increased taxes on working Americans; the other of increased public spending, which will lower unemployment and raise revenues, in turn building a stronger economy.
One endorser of the report, University of Michigan economics professor Howard Stein, told MT conservative politicians want to end government spending because it is â€ścrowding out private business spending and supposedly creating negative sentiments among investors.â€ť Stein says, â€śThis is exactly the same kind of reasoning which encouraged Herbert Hoover to cut government spending in the 1930s, helping push an economic downturn into the Great Depression.â€ť
Economics professor at the University of Michigan-Dearborn Bruce Pietrykowski, another endorser of the report, told MT, â€śThe first order of businessÂ should beÂ to create jobs â€” and thatâ€™s really the only reasonable way to deal with the long-term government deficit.â€ť He says jobs and wage growth are key factors towards leading out of a deficit, because working families with extra wages tend to spend more income than the rich, which in turn creates revenues for government.
â€śThe alternative,â€ť he says, â€śwould be utterly disastrous for Michigan workers and their families.â€ť