Frank Newman, former deputy secretary of the U.S. Treasury, presents one of the most interesting arguments I have seen for government deficit spending. I have thought all along that the best way out of a recession would be to spend our way out. Demand simply isn’t created and when companies don’t see demand, they have no reason to expand. China is investing in its future and seeing enormous growth because of it.
Granted it does sound simplistic, but it is not often that I have seen someone suggest that we don’t have to worry about our debt problem because we will never pay it off. Newman suggests that there will be no future added burden on our children and grandchildren as the politicians would have us believe and that we will not face the same problems as Europe because their problems stem from being divided.
Is his argument sound?
Should we really stop being concerned about the amount of debt that we are building?