Monday, December 08, 2008

Fiscal Expansion

Paul Krugman, in the New York Times on Dec 1st op-ed column,
One more thing: Fiscal expansion will be even better for America’s future if a large part of the expansion takes the form of public investment — of building roads, repairing bridges and developing new technologies, all of which make the nation richer in the long run.

But is “fiscal expansion” in the form of subsidizing the production of automobiles, which are sold by the expedient of increasing consumer debt, good for the nation in the long run? I doubt seriously that it can be argued that producing expendable goods and increasing both federal and consumer debt in the process is “making the nation richer in the long run.”

And don't accuse me of favoring white collar over blue collar; I was against the Wall Street bailout, too. I am opposed to the whole business of politicians prating endlessly about how bad things can get and passing measures in panic mode for the sole purpose of averting disaster. That is the antithesis of leadership. I am totally in favor of Obama's modality of proposing solutions, and of the "New New Deal" which he proposes and which Paul Krugman endorses.

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