Tyler Cowen is much taken with Raghuram Rajan’s essay arguing that “the West can’t borrow and spend its way to recovery.”
No one supports stimulus but opposes long-term measures to enhance our competitiveness. The real position Rajan’s arguing with is that “the West should borrow and spend its way to recovery while making the long-term reforms necessary for growth.”
What is needed is agreement on what will help in the long-term. And no one should disagree with the fact that we need to rechart our course We need to choose what will and won’t get done in terms of long-term reforms and short-term reforms, always assessing the result against the state GOAL.
Washington Post columnist Ezra Klein concludes in his Wonkblog on May 3, 2012:
“At base, there are two major economic arguments in American politics today. Should we do more stimulus or not?”
Unfortunately, Erza, Tyler Cowen and Raghuram Rajan all miss the OBVIOUS, which is the policies and programs necessary for growth must be based in broadening private, individual ownership of new productive capital assets of corporations simultaneously with the growth of the American economy. We must empower ordinary Americans with insured capital credit financial support to acquire the future productive capital wealth and pay for it out of the future earnings of the investments. Thus, stimulus is directly tied to creating new productive capital capacity and thus wealth, while simultaneously building greater consumer power to support the new, expanded economy and at the same time (long-term) reducing dependency on government make-work, military-industrial contracts, and welfare to prop up the economy through taxation and increasing debt.
