August 13, 2009

Stiglitz on infrastructure

Wednesday afternoon on Bloomberg, Nobel laureate Joseph Stiglitz was interviewed by Carol Massar about the economy and the best thing to do moving forward. While it primarily focused on the banks and the aid to them (Stiglitz wasn't a huge fan of providing the banks with equity without making sure they'd lend money), the discussion veered over to investments in the country as part of the stimulus. He also discussed the 30 years of underinvestment and our need to step it up.

Specifically, he was talking about raising taxes to fund this. We've coasted on the infrastructure (schools, roads, water systems, telecom systems) we built over the 20th century for basically the last 30 years. We've failed to adequately build for a prosperous future and now we have to make up for lost time. Normally, we could borrow and invest but we can't right now because we've been borrowing and spending on tax cuts for years. As it turns out, tax cuts, once again, don't pay for themselves.

So we need taxes, but the good thing is that taxes collected and spent on building things we need helps the economy through employment and increased economic efficiency. In other words, it's not lost down a black hole like a war.

Posted by mcblogger at August 13, 2009 02:15 PM

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