The reduced national saving caused by big deficits leads to a smaller capital stock. This lowers productivity and therefore wages. To reduce our public debt government would have to save more (or even, perish the thought, balance the budget), leading to higher national saving, a bigger capital stock, higher productivity and higher future wages. To be politically crass: lower government debt means more shiny new factories with high wage American jobs. I’m willing to sacrifice quite a lot of government spending in exchange for higher future wages. [bold by HSIB]How about you, Barack?
Tuesday, February 18, 2014
How about you?
Keith Hennessey must like a Gershwin tune. Clearly he doesn't like the bleak economic future he sees staring us in the face;