Kodjo Adadevoh is the Director of Laboratory Operations at a small Biotechnology company in Bedminster NJ. Kodjo has been a freelance writer since 2008 and has written over 200 articles for various online sites.
The recent increase in spending by the government in the face of a 1 in 80 year economic event is clearly the right thing to have done. I cannot imagine what the state of the economy would be without the necessary intervention. When the economy goes into free fall, the short term remedy is government spending, since the private sector is in no position to remedy the situation.
The issue with debt and deficits has everything to do with the growth in the economy (slow at the moment) and what the US decides to spend the tax receipts on. If the US continues to fulfill the role of world police, maintaining over 150 bases all over the world and spending money on arms that are outdated (borrowing money to do this), then where on earth is the fiscal restraint. Isn’t it obvious that the remedies for overcoming structural problems are to rework the system to stimulate a resurgence of manufacturing in the US and increase the wealth of the middle and lower class? The path is a long one but necessary one. The US has to first start with a national consciousness and decides on what things are in the national interest. Education is paramount and the type of education is even more important. Job mobility, retraining, and appropriate government incentives are the engines for progress. Make no mistake, tax rates can be a negative or positive engine for growth, the argument always is what levels are appropriate. I have always favored the idea of a flat tax rate; it removes all of the mystery and contention from the picture. Clearly tax reform is absolutely necessary; it is really hard to fathom how millionaires can be paying 14% in taxes. This is not an issue of tax warfare, it is simply an issue of overcome the debt and deficit, every citizen has to contribute their share to moving the country off of life support. It is a fact that the US started this unending period of deficits and debt during the Reagan administration, so it is worth a further examination to determine how to get the country back on track, even if it requires more taxes by the rich. There is ample room on the linear portion of the Laffer curve, from zero to close to the peak without disincentivising the rich!
Professor Stiglitz, it is really refreshing to read your eloquent assessment of where this great nation stands and the two options the lie before us with respect to the type of leadership that we need to get us through the challenges that lie ahead. I am often perplexed by how ignorant people are of the extent of the economic crisis that we all experienced in 2008 (1 in 80 year event) and how close we were to falling off the cliff. I am also perplexed by how uninformed people are about the structural problems we face and how a total change in course is required. Addressing the educational system, energy independence, the debt and deficit problems and the growing gap between the rich and the poor (via tax reform) are critical elements to getting this great nation back on track.
Professor Sachs couldn’t have said this any better. Any great nation can only remain great when all of its citizens are included in the union. Inclusion isn’t attained through lip service, but rather through carefully designed policies that aim at the education system, housing, healthcare, employment and safety of all citizens.
Fundamentally or dialectically, it should be obvious to any clearly thinking person that a country full of well-educated and productive citizens is much better than a fractured and divided country. We are all our brother’s keeper i.e. united we stand and divided we fall. Keep up the good work Professor Sachs!