The Fiscal Times: Opinion: Mark Thoma: How Keynes Would Handle an Abnormally Slow Recovery
This post was originally posted at The New Democrat on Blogger
I'm all in favor of trying to boost economic and job growth when the economy is weak with something like a new national infrastructure plan, a National Infrastructure Bank. But when you have a national debt as high as your Gross National Product, I mean 17 trillion dollars is one figure. I bet most Americans have a hard time getting their fingers around the total size of the American economy as well as national debt, and when it is that high it blows their minds. Your credit card bill is due and to keep what you need to pay back from getting even further out of hand you at least have to start paying some of that back to keep your credit from being ruined altogether.
We have a financial deficit, an infrastructure deficit, an energy deficit, a manufacturing deficit, and a tax deficit. Our corporate tax system is not competitive with a lot of the developed world. When your economy is just barely over the water, that is the perfect time to fix all of those things. But do it in a fiscally responsible way so you don't make your current financial situation any worse than it is or it has to be and, yes, interest rates are low right now but artificially low because of the Federal Reserve decisions, not because of any real strength in the economy. So:
1. Let's encourage more corporate and other business-related investment in the United States, including manufacturing and energy.
2. Let's start rebuilding this country with a National Infrastructure Bank.
3. Let's encourage more manufacturing in America and stop encouraging companies to send jobs overseas.
4. Let's create a plan to move America toward energy independence by producing America's energy across the board, at least in the short term.
5. And let's have real tax reform so we can lower taxes on the middle class, which would also boost economic growth as well.
But let's pay for all of these policies instead of adding to our national credit card.