Robert Kuttner On Bogus Economics: Public & Private Debt Are Very Different
"Unlike private credit-card debt," he writes, "public borrowing can improve a depressed economy’s performance." When the government borrows, the money is put into projects and services meant to give the economy a boost, and the reason the debt is currently going up is because the economy is under-performing. He argues that if we decrease unemployment rates and improve economic conditions, then that debt will decrease. "The idea that the debt inflicts a burden on our grandchildren and depresses their standard of living has it backward," he says. "What is destroying the prospects of future generations is our failure to generate a recovery with decent jobs."
While there is great debate over how to balance the nation's budget, Kuttner says that job creation, not austerity measures, should be the primary concern. In his keynotes, he explains that in times of deep recession we should be investing in people and services. Helping to grow the economy will increase our deficits initially, of course, but will eventually make it easier to reduce the deficit. Kuttner is the author of the highly-acclaimed books Obama's Challenge, and A Presidency in Peril. He is currently the co-editor of The American Prospect and has over 20 years experience writing and speaking about financial and economic issues.