Quote:
Originally Posted by TexTushHog
...Keynes was averse to unnecessarily running up government debt in flush times...
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Exactly!
And that's been at the heart of the point I've been trying to make in several threads -- that is, that if we're going to spend money in an effort to put people back to work, we need to get some bang for the buck. If congress's goal had been to blow the $800 billion stimulus package of 2009 in the most ineffective way possible, they couldn't have done a much better job.
The sad fact is that we really do need investment in infrastructure, but it needs to be done in a thoughtful and effective way. Instead what we got was wasteful pork and political payoffs, and a hodgepodge of ineffective and ultimately unsustainable tax cuts. We blew a big hole in the deficit for virtually nothing.
It would have been better to spend the money in any number of different ways. One example I offered in another thread was converting several million 18-wheelers to CNG and building the fueling infrastructure therefor. Not only would that put a lot of people to work, it would reduce our reliance on imported oil, as well as somewhat improve air quality in the bargain.
The Erie Canal is an excellent example of a publically-financed infrastructure project from very early in our nation's history. It opened up trade to the Great Lakes region and gave farmers in western New York State and other areas the ability to move grain and produce to coastal population centers, from where some of it could then be exported.
Now
that was a stimulus package!
Quote:
Originally Posted by TexTushHog
CaptainMidnight, I know of few Keynesian who would argue that there are not serious structural issues in the economy, although most would put at least one or two of them above the balance of trade accounts...
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Possibly, as there's no shortage of structural problems our economy faces. But I don't think many people would argue that our very large negative trade and balance-of-payments deficits aren't extremely serious problems. Another is the very large structural fiscal deficit, especially inasmuch as the currently gridlocked political process means that there's no credible path to anything near balance anytime soon. Still another is our failure to fix the financial system, as Dodd-Frank does nothing about TBTF and little about Fannie and Freddie. Yet another is rapidly-widening income disparity, largely caused by the push toward free-trade globalism begun in the 1970s, resulting in decades of de-industrialization. Most of our recently created "service industry" jobs don't pay very well.
We've spent many years consuming too much, saving too little, and producing and exporting too little. All these are serious structural problems, in my opinion.
