So…are you suggesting that the best way for this country to find sound fiscal footing is for the government to spend, spend, spend???
I’m reminded of the closing line in the classic movie ‘Bridge over the River Kwai’………………… “Madness”!!!!!!
EDITOR: In a word, yes. During times of prosperity, we must tax more and cut government spending to balance the budget and reduce debt. This occurred during the Clinton Administration due to bi-partisan actions. But during recessions and depressions, it is essential to run deficits to get people back to work. This is known as Keynesian economics.
Our problem this time was the failure to adopt a second Recovery Act, but it was turned down by Congress. The first stimulus bill stopped the precipitous fall that was leading to another depression; the second would have brought about recovery and prosperity.
Think of it this way: When we reduce governmental spending, the result is massive lay offs for industry and various levels of government and education, thus reducing tax revenue and increasing government subsidies to the unemployed and the otherwise needy. Both add to deficits! We prematurely tried balancing the budget in 1936 as the economy was beginning to recover and the result was a double dip depression starting in 1937.
It took the massive governmental spending in 1940 as we re-armed our future allies and ourselves to extract ourselves from the Great Depression.
When we get people back to work, they in turn are able to purchase items from others which produces jobs, thus creating a virtuous cycle. This is known as the multiplier effect, resulting usually with about $2.5 to $3 of additional Gross National Product for every dollar spent.
A healthy economy can readily handle our level of debt. It will shrink as a percentage of Gross National Product – the real measurement of fiscal responsibility – and can actually pay down the national debt, which occurred in the late 1990s. Some of us can recall that economists were concerns that we would pay off the entire debt, which would have dire consequences in itself, a subject for another discussion.
What we are saying here is simply basic principles of economics.
So….I guess we need to hope for another World War……………………NOT!!!!!
Actually, we are in the beginnings of a world war. It is a war being waged in many countries against corruption, economic stagnation, and impending recession/depression. In the US the biggest weapon being used is hot air and so I suppose we will lose. Too bad. Millions more will suffer and a new war may begin and the weapons will be far more deadly. Too bad.
War, like poverty, is inescapable we are told, and so we cannot have either a “war on poverty” nor a war against war. Both ideas are fairy tales, and ridiculous. So “man up” guys, get ready for the slaughter. A conflagration is good for the spirit. It cleanses the system.
Too bad. But . . . .”God’s will be done”. Right?