Wednesday, June 9, 2010

The Economy

Apologies for the lack of direct Mississippi content, but this is heavily on my mind.

There is no doubt that the United States has a long-term debt problem. Our deficit is growing at an unsustainable rate. At the same time we are in the midst of the Bush Recession that threatens to double dip with the news of the collapsing Euro and the oil spill. Let us all remember that the only President since 1980 to run at a surplus was a "tax and spend Democrat". Bush 43 doubled the deficit from 5 trillion to 10 trillion. Does that drummed up Iraq war taste good or what?

There is a lot of populist clamor to cut federal spending, and I understand the sentiment. However the recession we are in does not allow for us to slice government spending at this point. The private sector has started recovery but the jobs are going to be slow to return. We are teetering on a double-dip recession and without public spending to make up for the lack of private it could be bad. We have to make the unpopular choice to create a jobs-based stimulus package that is substantial. The sooner we get folks back to work, the sooner they are paying taxes.

We cannot afford to sit idly while our economy slips into a five year stagnation. There will come a time once the economy is stabilized where austerity makes sense. There will be a time to cut spending and raise taxes. Yes it is going to take both to get some serious fiscal responsibility. This, however is not the time for austerity.

3 comments:

  1. once social security, interest on the debt, and the military are funded, we are literally out of money each year at this point. that's before the FBI, CDC, EPA, etc. get one dime. we are the first nation in human history that tried to fight a war (two!) while lowering taxes. we have 2 generations that have been told that cutting taxes fixes all problems. There is an unwillingness to believe that spending cuts aren't enough and that taxes should be in the picture. Republicans ignore the reality and democrats are afraid that the GOP will take their jobs if they take the debt (and thus taxes) seriously. They're probably right. It often feels like we're surrounded by generations of children that want a toy but don't like that their allowance has to be spent to get it.

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    University of Michigan

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