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I just happened to be flipping through the Channels and came upon Charlie Rose talking to Paul Krugeman PhD. While I wonder how ideas form and take on a life of their own, I do know it happens best when all the distractions are eliminated. I guess kind of like a retreat or a time to think our own thoughts.
I listened as doctor Paul Krugman talked and wondered why the thoughts he expressed rang such a strong clang in my head and stopped wondering why he won the Nobel Prize. Mr Krugman while an academic did not sound like an "Ivory Tower" theoretical professor but like a thoughtful analyst looking for answers in a morass of information and historical fact.
We look at the economy today and hear calls for belt tightening austerity as if spending less will solve the problem. Doctor Krugeman disagrees in his article titled Myths of Austerity and in the more at depth interview with Charlie Rose makes a cogent and fact based argument against austerity as the answer.
Sadly, however, he also points out that austerity sounds good to conservative politicians and the remedy will never be addressed by congress. We all respond with our own proclivities and ingrained beliefs in crisis much like self defense mechanisms we exhibit in our daily lives it is no different in this case.
Myths about economic policy are much like "old wives tales" and quack medicine. People try something - it seems to work - it becomes a hard belief. The odd thing about austerity theory is that it doesn't work if you believe in growth that keeps pace with the population.
Some people see cutting back as being the same thing as efficiency and waste reduction and that just isn't the case. Debt (their concern) is not just caused by spending but it is also caused by decreased revenue.
The crux of this issue and our economy is not spending (by the government) but lack of spending by our consumers. It is true! The causes are many and include outsourcing, two wars, the decline of our educational system and work force , loss of the innovation edge, etc.
Jobs is the best indicator and lack of investment in the future and short sighted corporate management follow closely.
Maximizing profit replaced growth and market share back in the 1990's and smaller more profitable ventures were seen as "hot" and constant but moderate companies lost favor. Consistently strong but non-flashy companies continue on today doing well but not always making flashy profits.
If we want to lead the world we cannot abdicate by shrinking our economy but we must have a national priority for job growth and company leadership enrichment.
Confidence in this economy will not happen if we "turn tail and run" hunkering down and thinking we can save our way out of debt. We MUST improve revenue, strengthen business practices, award innovation, create opportunity, inventory our resources, and create a plan for the future. It will cost money but the growth that follows will soon over shadow the debt if we do it right.
Entitlement programs will decrease as jobs are created and we can reverse and minimize dependence on Medicaid in the future.
We are on the verge of success or failure what we do as a country will determine the outcome.
Debt = Revenue - Expenses and not just being austere misers. Miser is misery without the why (Y)
