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Recovering Fully From the Coronavirus Shock Will Require Large Increases in Federal Debt—and There's Nothing Wrong With That

Originally published at http://www.commondreams.org/views/2020/07/17/recovering-fully-coronavirus-shock-will-require-large-increases-federal-debt-and

I suppose the republicans use this kind of thinking to justify all the giveaways to the wealthy or corporations because every crisis we’ve had they’ve gotten richer while everyone else poorer. What needs to happen is millionaires and billionaires need to be taxed MORE to fund the recovery because they have so much money they aren’t going to be spending it all to stimulate the economy anyway. But that is socialism, which in this country that is considered evil by many; the republicans definitely won’t let this happen since they are in office precisely to prevent this from happening.

Another thing that also needs to be done to pay for the recovery is to cut the defense budget significantly and end all the giveaways to defense contractors, but there isn’t enough support among republicans or democrats to do this.

So what we’re left with for how to fund a “recovery” (I doubt we’ll ever truly recover from this like we never truly recovered from the 2008 crisis) is to add to our massive debt. The long term effect of this that the author didn’t mention is that 1) it adds to the interest costs of carrying that much debt (which reduces the amount in the budget for everything else, 2) it gives republicans more ammunition to justify their cruel austerity measures, and 3) it increases the risk of running out of places we can borrow money from. I guess as long as the Fed will continue to loan the gov’t money they create out of thin air then we can just do this indefinitely, but common sense tells me that this can’t go on forever and sooner or later we’re going to have a massive crash when the dollar has lost ALL of it’s value. Then we’ll REALLY find out what inflation is.

Agree----We can pay for our needs----we don’t need to put future generations in debt.

Cut the war industry by 40% and invest in COMMUNITY HEALTHCARE CENTERS in every neighborhood

Start a public housing program----and I mean hire thousands and build affordable housing-----and let’s design these projects with local in mind.

What The F ?
This is just more economy first planet second capitalistic infinite growth on a finite planet Horse poop.

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Plus with the world steadily moving off the dollar as the global currency it will only tighten the noose around the U.S.'s neck.

“put future generations in debt”? That incorrectly implies that households are obligated to pay back the national debt.

I see from the article a belief that the government owns, or is responsible for the economy, and that it can and has a duty to “put the economy back on its feet, a responsibility to help the poor recover from this hit.” - Ideas that could have been spoken by ‘economist’ John Maynard neo-Keynes.

Here is a contrary opinion to consider:
A Keynesian Path Would Be the Wrong Path for the U.S. Economy
https www aier org/article/a-keynesian-path-would-be-the-wrong-path-for-the-u-s-economy/
“A second problem, which Hayek identified in The Road to Serfdom, arises as the government attempts to manage the economy without the requisite knowledge. Without the knowledge of individual preferences, in particular, the government will tend to substitute the preferences of its leaders for those of the individuals in society. Individuals will do their best to achieve their own ends given the constraints imposed by government officials. And, since the ends of individuals do not perfectly align with those of government officials managing the economy, they will tend to undermine the plans of government officials. What will a government do when its plan inevitably fails? The fear, according to Hayek, is that the government will insist on its plan. Such an insistence would result in even greater efforts to subvert the plans of individuals for the plan of their leaders.”
“A recent study by Christian Bjørnskov looks at 212 crises across 175 countries from 1993 to 2010. He finds that, following a crisis, countries with higher levels of economic freedom–that is, with institutions closer to those proposed by Hayek than Keynes–suffered smaller economic contractions and faster recoveries.”

(Because of Common Dreams current policy towards hyperlinks, it is up to you to supply the obvious missing pieces of the link above.

The debt that exists today weighs on the current economy—and when the US loses the power of the dollar around the world we will really begin to know why you pay your debts----there is a price—and many are paying it today.

I wonder how long the veneer that the corporate media create will last???