Worldwide austerity will make things worse
In the Oct. 21 News, columnist Robert Samuelson estimates the world debt at $134 trillion. But just as people decry the U.S. debt, it is meaningless without the other side of the financial statement, namely the assets. The latter represent the U.S. resources that can be called upon to increase output – natural resources, unemployed people, idle factories, farms, forests, etc. Their value is estimated conservatively at $200 trillion. A case can easily be made for them to be near $400 trillion. If put to use, sufficient assets exist for us to pay off the world’s debts.
Samuelson concludes with a plea for building a stronger economic foundation. In my lifetime, it took an all-out war (World War II) before the president was allowed to print the money to increase the nation’s output to fight a two-front war, building an economic foundation several times that of the prewar period and launching the greatest period of generalized prosperity in the nation’s history.
The most effective way to stimulate economic growth has been historically with massive federal expenditures for infrastructure, communications and education research, to name a few. Worldwide austerity would merely make things worse, as the Europeans have discovered.