I was hoping you’d know. Actually, we discussed this exact topic in May 2009 (pre-blog). Two-plus years later, the recession is technically over, but our economy is still a mess. Growth has slowed, and another recession is 50/50, while unemployment remains very high and threatens to
stretch on for years. We also have deep structural economic problems, and the political will to tackle them is absent and the whole process gridlocked.
Still, a lot of ideas are out there for putting the economy back on track. On Thursday, I’ll open by describing:
- The problems we face, both short-term and longer-term.
- A little bit about their causes.
- The major proposals for fixing the problems.
This will take no more than 15 minutes or so, I promise.
(Two comments on the politics. First, I will describe the economic plans of President Obama and those to his left, and the criticisms of them, but I cannot do the same for the Republicans’ plans because they really have not proposed anything. Sure, Boehner and Paul Ryan, et. al., have trumpeted their jobs “plans,” but they consist of just more upper income tax cuts, more deregulation, and more fiscal and monetary contraction. Having the government do nothing to help the economy recover is a defensible position, at least philosophically, but it’s a stretch to call the same ol’ same old menu of cut, privatize,and deregulate job plans
(Second, a note about what a “liberal” economic proposal is – and isn’t. Many of the big ideas I’ll be highlighting used to be considered Econ 101; e.g., increase government spending in a recession and ease monetary policy. The political process, however, has marginalized them as “liberal,” while immediate austerity is center stage. Yet, this doesn’t mean that other ideas from the left deserve to be treated as conventional widsom. Other proposals I’ll cite are more controversial and really come down to political preferences more than economic science. Whether more fundamental lefty economic ideas are all workable or desirable is a great topic, one that we’ll discuss later this year when we debate “economic planning” and “lessons of the New Deal.”)
DISCUSSION QUESTIONS –
- What are our major economic problems? Which are short-term problems and which
structural long-term problems?
- What caused them? Why do they persist?
- Would solving some of these problems make others worse, or are any of these problems also a part of the solution?
- What are the major ideas for fixing our economic difficulties, and what are their benefits and costs?
- How much freedom of action does (and should) the government have to help us out of this mess, given the…
— Debt it’s already incurred?
— International situation (esp. Europe)?
— Some of our problems may be beyond government’s ability to solve?
- Given the political gridlock, what can realistically be done?
BACKGROUND LINKS –
- Ten reasons for the mess we’re in. Also, six theories of what’s gone wrong. (I can explain
any of these, but note that there is much disagreement.)
- The perils of immediate austerity. The long-term costs of austerity.
- The investment gap is one major problem. Social investment now is almost costless because interest rates are so low.
- Obama’s jobs plan. [UPDATE: A more detailed explanation, which I’ll quickly summarize on TH]
- Europe‘s debt crisis combined with U.S. inaction could drag us all down.
- A more conservative view on what to do and not do.
Whatever our politicians do — if anything — is going tobe decided very soon. Come learn about it and/or belly up your views.