Mainstream America gets it. David Brooks emphasizes that America has the ability to economically self-correct. Let's hope he's right and that his colleague at the NY Times, Mr. Krugman, is wrong as cheerleader for the OWS protestors while advocating for yet more government deficit spending. Fortunately, most Americans disagree with Krugman.
"...Quietly but decisively, Americans are trying to restore the moral norms that undergird our economic system.
The first norm is that you shouldn’t spend more than you take in."
...Second, Americans are trying to re-establish the link between effort and reward.
...The third norm is that loyalty matters.
...Some economists say the government should be spending more now to stimulate a recovery. Thirty-eight percent of Americans seem to agree with that. But 56 percent have said “government spending when the government is already running a deficit is the wrong approach during an economic downturn because it is only a temporary solution that increases long-term debt.”
...These majorities are focused on the fundamentals. They say that repairing the economic moral fabric is the essential national task right now."
2 comments:
Was it stimulus itself that failed or the misapplication of stimulus?
For example, instead of helping failing banks what if we had instead helped hopeful start-ups?
Also, it was the moralist GW Bush who exhorted the American people to spend after 9/11. And it was Alan Greenspan who held rates at zero endlessly which fueled the housing bubble. And then it was reckless bankers who issued loans with no due diligence. So, I place the entire blame on these factors. Consumers would not have been able to spend as they did without the setup from the top.
Hi Tobias,
Keep in mind that two BIG spending efforts were undertaken by the government. One was TARP (Troubled Assets Relief Program) and the the other was ARRA (American Recovery and Reinvestment Act), also known as 'stimulus.'
Many believe that ARRA failed. Some say it was misapplied, others say it was too small. It did fail to revive the economy, but it may have prevented things form deterioration further than they did.
TARP succeeded for the most part since most of the banks that benefited are still afloat. Many believe the banks should not have been bailed out. Emotionally, I can buy into that argument, but the viability of the financial system was at great risk after Lehmann Brothers failed. The risk was very great if the government had not stepped in.
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