Stop worrying about the deficit!
There is a cottage industry devoted to hand-wringing over the size of the US federal budget deficit, and Robert Reich is exasperated that so much focus is paid to the deficit, rather than to jobs and growth (and before you ask, when the economy is still well below recovering its previous trend, reducing the deficit will not lead to more jobs and higher growth, just so we’re clear).
Public investments that spur future job-growth and productivity shouldn’t even be included in measures of government spending to begin with. They’re justifiable as long as the return on those investments – a more educated and productive workforce, and a more efficient infrastructure, both generating more and better goods and services with fewer scarce resources – is higher than the cost of those investments.
And before you start saying “we tried this with the stimulus and it didn’t work” , let me just interrupt you: “you’re crazy, or craven. the stimulus worked, it just a) wasn’t big enough; and, 2) was too focused on tax cuts (which can be put into savings or debt reduction, rather than stimulative spending) rather than direct spending”.
If there were a problem with deficits, it would show up in the yield on government bonds, which are near record lows. So, can we please ignore the people who profit from the deficit chickenhawk industry and instead look at the objective evidence and start building? If we don’t, I’m worried that Bob Reich will completely lose his mind.
Plus, do you really want to listen to what Alan “Snoopy Snoopy Poop Dog and the Enema Man” Simpson says?