In this article, the author writes about current-day testing of regions of the United States. He ends his article by stating three things: [1] that uncertainty is the main cause of a lagging economy; [2] increased fiscal relief would be beneficial; and, [3] as far as spending cuts and tax increases go, it's an open question. My question is: what do you think the best policies are for the mid-west and Michigan (on a national level) or Detroit and Kalamazoo (on a state level)? Any other thoughts on testing regions of the U.S.?
On a side note, if anyone's interested in hearing a philosophy talk by Lambert Zuidervaart tonight (3/1/13) entitled "Art in Public," it's at 8:00 PM in the Olmsted Room.
I definitely agree with the statement of uncertainty causing a lagging economy. I believe that for Michigan we are having problems with both uncertainty and fiscal relief. As a state we are not combining the two to create a better economy and that is why Michigan is still having a hard time recovering.
ReplyDeleteI find his section on spending cuts vs. tax increases very interesting. If we assume his findings are correct (though this is indeed a large assumption), then his assertion that modest tax increases on the upper tax brackets will help to "soften the blow" could be very useful in shaping policy in the coming months.
ReplyDeleteI definitely feel that government induced uncertainty and excessive spending has greatly contributed to a slower recovery. Will cutting spending actually hurt growth and reduce job creation? I think spending cuts would be less damaging than continuing to increase taxes on upper income earners would be. Which type of "economic medicine" is best now? Spending cuts are needed but not to the extremes of the sequester.
ReplyDeleteI would disagree with Cameron's assessment of the impact on spending cuts. I think that a small example of the impact of spending cuts can be see when talking about spending cuts in the postal service. The cutting of postal service days will definitely cut the amount of hours paid to workers or the number of worker total, these cuts either mean that employees have less to spend or are unemployed and are therefore contributing less to other businesses. In general government spending can have a great affect on micro economies within states and local communities.
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