A Rising Deficit Isn't the U.S. Economy's Worst Problem
Government spending -- on infrastructure, education, research -- is what's needed to speed a recovery.
More spending on infrastructure will speed the U.S. economic recovery.
Photographer: Spencer Platt/Getty Images North AmericaThe Covid-19 pandemic will eventually subside, but the economic hangover from the recession it brought will be long and painful. As calls grow for government to step up and spend money in order to get the economy back on its feet, deficit hawks already are raising their voices in response. Hastening the post-Covid recovery will require overcoming the doctrine of austerity, which did so much to hurt the U.S. and other countries during the last recession.
When the financial crisis led to the Great Recession back in 2008, the idea of fiscal austerity was quick to rear its head. A number of prominent right-leaning economists disparaged the notion that government spending could ameliorate the downturn. Some even argued that cutting spending would expand the economy, by increasing confidence in the government’s solvency. Others warned that too much government debt would slow down economic growth.