Tuesday’s Big Idea
Keynesian Economics
What should the role of government intervention be for the U.S. economy? The two major political parties in the U.S. have drastically different views on this question, largely based on ideological differences.
In today's lesson, however, Big Think Chief Economist Daniel Altman argues that current conditions -- nearly the lowest fixed borrowing rate ever -- should dictate policy, not ideology. In addition, the current state of public infrastructure, which Altman calls "deplorable," needs to be fixed in order not to hold back the growth of the economy. Low interest rates offer the perfect opportunity to fix this problem, Altman says.
But where does the money come from?
"Even if the result of the new spending were an increase of just over 0.1 percent per year in GDP," Altman points out, "starting a decade from now, the borrowing would pay for itself."
Read Altman's argument here.
