“Debt is one person’s
liability, but another person’s asset.” – Paul Krugman
USA Today’s Columnist Duncan
Black makes the case in his piece “Unemployment, Not Deficit, Hurting the Economy”
that what is truly hurting the economy is not the debt but, the slow rate at
which the U.S. is moving back to full employment. He makes these claims in the
face of the so-called “deficit hawks” whom believe that our only path back to
economic prosperity is by way of deficit reduction, either through spending
cuts or revenue increases (depending on which ideologue pundit is asked). Anyone
that watches any given news network whether it be Fox News, Msnbc, or Cnn is
sure to hear that high unemployment is a problem in this country. However, more
likely than not, these news programs convey that the national debt is a much
more pressing issue.
In his
editorial, Black highlights one significant contradiction in terms of congressional
rhetoric versus action. The “deficit hawks” when presented with the opportunity
to cut spending dramatically, thereby reducing the deficit, tend to back-off
and claim they are actually against spending cuts and furthermore blame the
opposition party for the impending cuts. Twice now, with respects to the “FiscalCliff” and “The Sequester”, both parties have decried these dramatic spending
cuts and tax increases that would ultimately reduce the nation’s debt in a
significant way. Black, as a liberal, is in favor of congress’ new found
opposition to austerity. In fact, he seems to have joined the ranks of many
economists and financial institutes that have proclaimed our nation’s biggest
problem is unemployment and the best way to combat this problem is through
government spending and investment. This thought process might seem counter-intuitive
to anyone that watches the mainstream media but, rest assured it is backed up
by a mountain of evidence (One of the more vocal proponents of government spendingis Nobel Prize winning economist Paul Krugman who best explains this seemingly counter-intuitive assertion).
Black’s
entire editorial is an open ended question posed to the congressional “deficit
hawks”. He wants to know why their actions don’t match the rhetoric. I personally align
myself with the proponents of more government spending. As a student of
economics I have come to discover that economics is merely the study of
thousands of real time experiments conducted on both a local and global scale.
There is much evidence that suggests the best way to get out of a recession is
by way of government spending. As evidence to this hypothesis, I cite our
nation’s spending during the Great Depression, our minor recessions since, and
also the austerity Europe and the UK have implemented that has caused those
country’s economies to face a double dip recession. In a world where my spending is your income and your spending is my income, how can we possibly save to prosperity?
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