Sunday, March 07, 2010

Joe Stiglitz is a funny dude

He says we shouldn't worry about the deficit because of all the valuable assets we are acquiring by spending the money!

Here, check it out:

"Most economists also agree that it is a mistake to look at only one side of a balance sheet (whether for the public or private sector). One has to look not only at what a country or firm owes, but also at its assets. This should help answer those financial sector hawks who are raising alarms about government spending. After all, even deficit hawks acknowledge that we should be focusing not on today’s deficit, but on the long-term national debt. Spending, especially on investments in education, technology, and infrastructure, can actually lead to lower long-term deficits."

Sweet fancy Moses! Shall we count our valuable investments? The wars in Iraq and Afghanistan? Entitlement spending? Farm subsidies? Putting billions into acquiring failing companies?

Hey Joe! We are not running over a trillion dollar deficit because the Federal government is making big investments in education and technology. 

And by all means, let's focus on the national debt and not on the current deficit. Didn't it just double under the last President and isn't it slated to almost double again under the current one?

My, what amazing valuable assets we must have built up with that spending binge. 

Now he does go on to discuss how the business cycle affects the deficit and to opine that it is too soon in the recovery to consider spending cuts or tax increases for short term deficit reduction, which is perhaps a defensible point of view.  

But why oh why oh why do so many excellent economists turn off their brains when they address the public?



Anonymous said...

why o why... hmmm, that sounds familiar

Patrick R. Sullivan said...

Is he in favor of repealing Davis-Bacon so that infrastructure spending would go farther?

Unknown said...

I've just figured out how to win a Nobel prize (or at least gain political clout as an economist.) Use that veil of aggregation known as Neo-Keynesian macro-economics to discover general relationships that are so obfuscated that they can make the bureaucratic government look like wise and successful investors. Ya I know there were legit recipients like Ostrom and Hayek, but that route seems less profitable and more difficult. Munger, Angus, at the very least you'll get an ivy league tenure; and you'll boost your chances of a run for political office

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