A Blog focused mostly on Stewart Udall's quote:
"There is nothing comparable in our history to the deceit and the lying that took place as official Government policy in order to protect [the nuclear arms] industry. Nothing was going to stop them and they were willing to kill our own people.”
What is often lost in the discussion about government debt, especially in the discussion of extending tax cuts to billionaires is what the debt buys matters. Increasing debt to finance tax cuts is bad in the same way borrowing to go on vacation or gamble is bad; wealthy folks (despite protestations to the contrary) simply do not spend their proceeds on infrastructure or capital goods - they buy treasury bonds, in essence loaning back to the government at interest, in the same way they make money by charging the public interest for the money they received from the public for free. (or other existing assets, merely recreating a bubble). Is anything more reprehensible than for corporations, that caused the unemployment, to be generating record profits while unemployment is so high?
Debt offset by collateral, whether in the form a machine, school, hospital, wind turbines, solar panels is entirely different. As Martin Wolf points out, assets matter. In fact, I would go so far as to those that argue for consumer spending in the form of more trinkets are also wrong. Consumers were misled into overspending, their inflated housing and stock prices leading them to reduce these balances to a level thought to be more appropriate for their wealth position. When these perceived household balances were discovered to be overstated, consumers STOP spending on consumer goods, and desire to build up these balances. This implies INVESTMENT goods or PUBLIC INFRASTRUCTURE is too low, NOT consumer goods expenditures.
By Martin Wolf
Published: November 25 2010 20:43 | Last updated: November 26 2010 20:41
Crises have always led to intense discussion of the role of the state. The present one should be no exception. The immediate danger has not passed: just look at events in the eurozone. But the time has come to look at the longer-run implications. This is particularly important when one considers fiscal consolidation. On this I make a simple point: it is not just about debt; it must also be about assets.