The mindset of the right is wrong. The federal government is not like an individual or a state. It is the issuer of the currency. Individuals and states are just users. They must borrow to spend beyond their means. The government doesn’t. When the private sector saves, but the savings are not invested, the government must run deficits to provide the vehicle to absorb the savings, i. e. government bills and bonds. It’s a mathematical identity that many economists, politicians, and think tanks don’t understand.
The public must understand that the federal government has a major role to play in providing infrastructure, in the form of roads, bridges, power grids, research, education, health insurance, retirement benefits, and a living wage job guarantee to eliminate unemployment. Worker skills and attitudes deteriorate when workers are unemployed. When the individuals and private businesses have to provide for these benefits through savings, it reduces spending, which sustains demand and maintains a healthy economy.
To harness the capitalistic drive for innovation, entrepreneurship, and monetary success reasonable government regulations are required to prevent an unequal distribution of the rewards of productivity growth, maintain a healthy middle class, and keep people from falling into poverty and becoming a drag on the economy.
If we continue to think that capitalism is a self regulating wonder and people are self sustaining individuals that don’t need to cooperate in their endeavors we will continue to be a society struggling for answers and living with cycles of economic bubbles that destroy the spirit and will of the country.
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