June 28, 2011

Two Problems: Weak Economy, Too Much Debt

Ron Klain, Bloomberg

AP Photo

For two years, polls have shown that the American people have two strongly held beliefs. First, they think the president should do more to create jobs. Second, they believe federal spending should be cut, and the government should shrink.

To the progressive economists who form the cadre of President Barack Obama's advisers -- and indeed, to most mainstream economists -- these two views are mutually contradictory. In the classical Keynesian playbook, the way the federal government can create more jobs is by spending more: investing in public works projects, providing fiscal aid to state and local governments, sending stimulus checks to taxpayers, and even just hiring people directly. Demands that the government spur job creation while also reducing spending are, in this view, as...

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Related Topics: economy


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