Why Spending Cuts Aren’t The Answer

Although it is extremely hard to cut existing programs, it is easier to avoid launching new ones. But much of the new spending proposed by the president is for public investments with high rates of return. Failure to make these investments will actually make us poorer. For instance, if the government borrowed a trillion dollars at 4 percent and invested the money in projects with an annual return of 7 percent, we’d actually be richer each year by $30 billion than if we hadn’t made those investments. And because investment in the public sphere has been neglected for decades, there are thousands of shovel-ready projects with extremely high rates of return. — Robert Frank

Thank you Robert, for helping me see the silver lining in that $700b stimulus package.

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