Spend your way out of debt
Posted by hanson807 on June 29, 2010
sounds like a hokey infomercial. What idiot would recommend to someone going broke that you spend more money? Well, lots of people like Krugman do. He is not the only one who points to the recession spending of 1981-82. Scot Sumner bends over backwards to agree with him also. It simply isn’t possible to spend our way to prosperity. They have never known or maybe just never acknowledged where wealth comes from. It is not printed by the government. Those bills you have in your wallet are just like a written check, they are only worth something when there is money in the bank. If you print another check book, that isn’t the same as putting money in the bank.
We got lucky after WW II, and we got lucky after 1980. Both had new industries that didn’t diminish old industries and contributed millions of jobs and wealth to the economy to recover from recession/depression. Today we don’t. That doesn’t mean we couldn’t. We actually have one close at hand but it would take some courage.
We could drop all taxes on the medical system. We could make all medical 100% tax deductible. We could reform the laws concerning medical malpractice and the laws concerning testing of new drugs. What could happen is to have the US become a place to take medical holidays. People would come from world round to be treated in our country. We could develop new drugs, procedures and treatments with a fury never seen before. We are developing pharmaceuticals faster now than ever. If we open ourselves up to development, we could start the next giant leap forward if we had the courage to get out of the way.
We could also turn to robotics and batteries. These fuel industry and engineering. Again, we would have to make an effort to make these fields attractive. Reduce the taxes on the industries, reduce taxes on exports and imports of metals. Again we are looking for something to fuel the recovery. Wealth made, not confiscated from those who work.