The Nov. 10 editorial “Precautionary steps” discusses how Gov. Ed Rendell during his terms in office “increased funding for education, infrastructure and a host of other projects.” It relates how the Center on Budget and Policy Priorities recently “offered a stark outlook on the economy.” It then praises Rendell for cutting back state spending and concluded “Under ordinary circumstances, cutting funds – especially in education – would draw a strong rebuke. But in this instance, the governor has taken the proper precautionary steps to attempt to avoid tax hikes at a time when people can least afford them.”
WATCHDOG: The Intell has things backwards!
Government cutting back spending to “balance the budget” is the very approach that stifled recovery in the 1930’s and kept the nation in a Great Depression until World War II. As economist Sir John Maynard Keynes established, governments should build surpluses during prosperity and generate deficits during recessions. (Correctly, a large surplus was nurtured during the prosperous second term of the Clinton administration.)
Rendell should not have been overspending earlier during prosperity and should not cut back on worthy causes during the current financial crisis. Nothing is more wasteful and damaging to the economy than having large amounts of people and capital sitting idle.
