Friday, March 4, 2011

Deficit, schmeficit- We have other things to worry about like jobs!

Most Americans say that our Federal deficits are too large. I disagree. It is true that we are borrowing large amounts of money, but the politicians have it wrong. Just like in the Great Depression, our Great Recession needs economic stimulus. We need investments in our infrastructure. We need to “invest” in programs that will build our economy. If we get more people back to work, we get more taxes. Then we can start worrying about cutting the deficit.

We are still able to borrow money at a small interest rate. This shows that we are still fiscally responsible. Look at Japan. After their economy collapsed in the 90’s, they have borrowed heavily to rebuild and reconstruct their economy. They still are borrowing. Many economists believe that we need to be concerned when our debt to GDP ratio hits 90%. We are still in the 60-70% range. If you look at Japan, they are borrowing money are driving their deficits higher. Their debt to GDP ratio is 200% and is still borrowing money at a rate 1.4%!!

Our main concern right now should not be the deficit, but should be on the economy. We need to create more jobs. That means spend more money. If we have to borrow, so be it. Once our economy and employment rates get better, then we can address the deficit. If we lower the unemployment rates, then we get more taxes. Then those taxes can help pay down the deficit.

Inversely, if we are so gung ho on reducing the deficit, what will that do. We cut the Federal budget. That means cutting jobs. Plain and simple. That is all that means. If we get the $100 billion worth of cuts, just wait and see how that hits the unemployment rates and our economic growth. Write to  Senate, Congress, and the President and say no to the deficit cuts. Sure we need to keep the deficit in check and address it, but not now, not while we haven’t recovered yet.    

By the way, check this piece out to learn more: 

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