Making the Progressive Case: Towards a Stronger U.S. Economy by David Coates

by David Coates

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Paperback

First published January 1, 2011

Reviews

[Michael]

A fairly dense policy book which I never intended to read to completion. I read the parts I wanted to read. Interesting. Essentially, this book is a neo-Kenysian response to the government officials and economists Paul Krugman has named 'the Austerians' (that is, those who advocate for financial austerity in the face of the global recession). Essentially, the argument is that in times of high unemployment and reduced tax revenue, governments should stimulate the economy through deficit spending. "Priming the pump,' as it's called, results in large deficits and debt, but the idea is that the economy will continue to function, and as it heals, tax revenue will remain steady, then increase, thus allowing for the deficit and debt problem to be resolved.

Several points. First, the Europeans are in a period of austerity, and their economies are not improving. Second, the stimulus package signed into law by the Democrats early 2009 may have staved off an actual economic depression, but it's impossible to prove a negative (that is, we can't say with certainty what didn't happen). So even though the pump was primed, it's hard to prove if there was any benefit or not (I think there was). Finally, along with the large deficits our government continues to run, we are facing down damn near existence-threatening debt from our entitlement programs (Social Security, Medicare) which hang above all of our heads like the Sword of Damocles.

It's a Gordian Knot, no doubt. If we didn't have the entitlement bomb ticking away, I'd say more stimulus--targeted specifically at job creation--would be appropriate. However...there is also a more philosophical issue with the proper role of the federal government under our Constitution. But then again, the states did not create the kind of anti-poverty programs we have today, which is why the federal government made them in the first place. Of course, wealth comes from the private sector. Then again, we have tremendous income inequality. Taxes are at historic lows, but capital is now global, so...

All of this is well beyond my meager ability to solve. All I know is that millions, tens of millions, perhaps a hundred million of my fellow countrymen and women are suffering. As George Orwell said, "things have reached such a state of affairs that it is the duty of all intelligent people to pay attention to the obvious." Our system is dysfunctional. The future is now. We have to decide what sort of country we want to be. We can't keep on our current course.