This post was originally posted at The New Democrat on Blogger
Economist William Darity is saying that "since we could borrow over a trillion-dollars for the 2008 TARP bailouts and the auto bailouts that we could afford to borrow the same amount of money for a new Federal jobs guarantee". The problem is that we can't afford either and just because borrowing a trillion dollars is a bad policy for one reason doesn't mean it would be a good policy for another reason. You are still talking about putting an additional trillion-dollars on the national debt, that is all debt financed, and increasing the Federal budget by 37.5 percent .
It would be one thing if the economy was still in recession and you decided to do this as part of a short-term stimulus to put all of those people back to work. But it sounds like Mr. Darity is talking about an indefinite Federal program, all financed by the debt and adding an additional trillion dollars to the debt every year.
Ideas like this are being put on the table now because the 2009 American Recovery Act simply didn't go far enough. I agree with Progressive Economist Paul Krugman on this. The stimulus should've been 1.5 trillion dollars or more, a trillion for infrastructure investment alone, the rest for middle class tax relief, business tax relief and public aide to state and local governments.