In his column “Sipping a little tea”, Associate Editor Gil Smart opines: “But we would agree, I think, that expanding federal debt, and thus the federal government itself, won’t solve our problems. Our system, they fear, is sick; and more debt is the equivalent of additional toxin, injected directly into the bloodstream. Better, perhaps, to force the patient to endure withdrawal, for no matter how painful it is, it’s better than the alternative.”
WATCHDOG: We suspect that Smart may have been sipping a little of something else when he came to the above conclusion. While significantly increasing taxes on the top one-percent of the population and especially the top ½ of 1% would help reduce the current annual deficit, slashing government spending will only make things worse, as we are seeing by the recent jump in unemployment to 9.2%.
As economist John Maynard Keynes taught us, during sharp recessions and depressions onlygovernment deficit spending to generate jobs will lead back to prosperity. People out of work cost the government money and pay little taxes. People working don’t cost the government money and pay taxes. High unemployment (plus “W” tax cuts for the rich, unfunded expansion of Medicare prescriptions, and an unnecessary war in Iraq) is why we have been running huge deficits. During the prosperous latter Clinton years, we were well on the way to paying off the national debt!
The conservatives eliminated stimulus spending just as we were adding two million jobs. By prematurely trying to balance the budget, we are headed right into a 1937 type double dip depression.
We know we keep on saying the same things. But the self serving politicians and the majority of the country ignorant of economics keep on advocating the wrong policies!
