Galbraith video
Posted by WARREN MOSLER on May 22nd, 2009
In Every Way a Good Thing”: The Upside of Soaring Federal Budget Deficits
by Aaron Task
With the federal budget deficits expected to exceed $1.8 trillion this fiscal year and borrowing expected to top $9.3 trillion over the next decade, it’s no wonder many policymakers, politicians, economists and everyday Americans fear the worst.
But rising federal budget deficits are “in every way a good thing,” according to University of Texas professor James Galbraith.
Higher budget deficits are a natural result of declining tax revenues and rising unemployment and serve as a “great stabilizer” to the consumer and the economy as a whole, he argues — as you’d expect from the son of famed Keynesian economist John Kenneth Galbraith.
The government’s bailout of the banks was an “unproductive use of Federal borrowing,” but Galbraith is otherwise fully supportive of the administration’s borrow-and-spend efforts so far.
Furthermore, he believes those calling for the government to reverse course soon are being “terribly imprudent,” noting it took more than 20 years for the private sector to fully recover after the 1929 crash.
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May 22nd, 2009 at 7:42 pm
I think he is covering half of the story, yes many jobs are lost and will not come back. However, I see jobs going overseas because of bad work ethic, over zealous unions and deregulation of trade laws.
I know many who work at Kohler in WI, the company has been building facilities in China and Brazil for years. Now using the economic crash for an excuse everybody is gone never to return. Many more story’s like this, maybe even GM?
Will it take 20 years of depression to improve work ethic and get our government to work for the people again? Maybe by then the workers in China will have gotten lazy and let their government sell them out too.
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