Borrowing For What?

Noah Millman makes a compelling case:

The opposition [to the stimulus] usually described in terms of austerity, that we should be trying to cut the debt and have government tighten its belt just as private citizens have had to tighten theirs. And austerity makes absolutely no sense in the current economic environment. Precisely because interest rates are low, this is a good time to borrow. But the question is: borrow for what? Every dollar we borrow today has to be repaid or refinanced – and we should assume that refinancing will be at substantially higher interest rates than today.

The argument we need to be having is about how to increase national productivity.

That means reducing or eliminating subsidies for uneconomic activity – whether the mortgage interest deduction or agricultural subsidies. That means shifting the tax burden away from income – and especially away from wages – and towards consumption. That means shifting discretionary spending priorities away from defense and towards a sustainable infrastructure. That means shifting spending away from retirees and towards youth – and that, in turn, means getting more value per dollar out of both health-care and education spending (two areas where, I suspect, productivity growth properly measured has actually been negative).

There’s a vital role for Republicans to play in this argument that I don’t really hear them playing.

That role is getting into the weeds and finding ways to shift how government spends, not merely what it spends. But I fear the anti-tax ideologues will veto any shift toward consumption or energy taxes; and the very hard work of getting healthcare and education more efficient won't win many campaigns.