If and when the economy begins to grow faster - if more Americans get jobs, and we move toward a full recovery -- the debt/GDP ratio will fall, as it did in the 1950s, and as it does in every solid recovery. Revenues will pour into the Treasury, and much of the current "budget crisis" will be evaporate.
Get it? We're really in a "jobs and growth" crisis - not a budget crisis.
And the best way to get jobs and growth back is for the federal government to spend more right now, not less -- for example, by exempting the first $20,000 of income from payroll taxes this year and next, recreating a WPA and Civilian Conservation Corps, creating an infrastructure bank, providing tax incentives for small businesses to hire, expanding the Earned Income Tax Credit, and so on.
But what happens next week if Congress can't or won't deliver the president a bill to raise the debt ceiling? Remember: This is all politics, mixed in with legal technicalities. Economics has nothing to do with it.
Reich hits it out of the park as usual. create jobs and the economy will turn around. Increase spending in times like this not CUT!
Thanks to all members for participating in the discussions.
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