The hot topic of the evening was the federal government’s role in leading the nation out of the economic slump of recent years. Are deficits conducive to this end? Should the necessary funds be raised through taxation, borrowing, or the printing press? And just how much government intervention into the depressed economy is too much?
These are passionately debated topics, and last night we were treated to some passionate responses.
Whereas Jason Bailey, director of the Kentucky Center for Economic Policy, praised the feds in their efforts to borrow and spend during this time of weak economic demand for the sake of stimulating growth, Strow saw the efforts altogether differently – and on the most fundamental of levels:
“I think it’s false to say that the only way an economy can grow is by government spending money it doesn’t have. I fundamentally disagree with that. I think it actually goes the opposite.
We’ve found country after country, cross country studies, that the more they pile up debt and the higher their debt to GDP ratio gets, the slower their economies grow into the future. So it’s not some magic pill to spend money you don’t have that creates jobs and just creates wealth. I mean, if that were the case, Greece would be the wealthiest place in the word. They would not be in a crisis. There would be no European debt crisis. Italy would be smashing. Spain wouldn’t have 25% unemployment.
Borrowing and spending is not a path to prosperity for the individual family. I can’t do it for my family, and the federal government can’t either.”
Government borrowing and spending wasn’t the only topic Strow took a crystal clear position on. While Bailey discussed the importance of government providing social services like education, infrastructure, care for the poor … and care for the old … and care for the young … and a litany of other services, Strow was quick to remind viewers of a little thing called priorities. If you want to spend a dollar on one thing, you won’t be able to spend it on something else:
“But this goes back to the priorities. Congress and the president have to set priorities. If [the Head Start youth education program] is their priority, guess what, with a trillion dollar budget deficit, I got a trillion other places we can take money. If that is really what you want to do, if you really want infrastructure, really want education, there is money there. But you have to be willing to cut the things that are less on your priority list. And until you’re willing to do that, you can’t fund your priorities.”
But as political gamesmanship would have it, not many of our elected officials in Washington are willing to tip their hand and show their true priorities or make the tough choices necessary to create a sustainable budget. Fortunately for Kentuckians, a Senator from the Bluegrass State does not fit that stereotype.
Professor Schansberg explains:
“And I think that’s the great thing about Rand Paul and some of these others. Whether you would agree with him, we need people who are going to get up there and say something courageous, say something outside the box, get people to make commitments in a budget format instead of just playing games…
Even if you don’t agree with him, I welcome a loud, strong voice saying ‘Let’s make some decisions. Let’s put some real things on the table and debate them.’”
All in all, it was another great night on Kentucky Tonight for the Bluegrass Institute Board of Scholars.