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Reich: Spend More, Not Less, to Save Economy

Friday, 03 Dec 2010 01:09 PM

Economist and former Clinton Labor Secretary Robert Reich says Washington should spend faster, despite the deficit, to save the U.S. economy from plunging back into the red.

Most Americans are more concerned about jobs, not the debt, and those jobs are dependent for now on government check-writing, Reich argues.

“To get jobs back we’ll need more federal spending, not less — at least over the next few years,” he writes in his blog.

“Consumers can’t and won’t spend, banks can’t and won’t lend, big companies won’t invest in new capacity, and state and local governments are broke. Unless the federal government fills the gap we’ll continue to suffer near double-digit unemployment and slow growth.”

Reich says the deficit is serious problem and should be taken as such. But, he argues, President Barack Obama’s deficit commission is on the wrong track.

Social Security isn't the problem, Reich contends. A lift of the income cap to $150,000 from $106,800 would solve it. Reich was once a trustee of the public retirement scheme.

Nor can you blame Medicare as an entitlement program, Reich says. Instead, he argues, the problem is “the explosive growth in medical costs.”

The solution is to expand Medicare and use its weight to force costs lower through negotiation, Reich says, including a revival of the derided “public option” of completely government-run healthcare.

“Let Medicare use its bargaining leverage to get low-cost drugs and supplies. End health insurer’s immunity from antitrust laws. Allow the public to buy health insurance from a Medicare-like public option. And award plans that focus on disease prevention rather than expensive diagnostics and procedures,” he says.

“Everything else the deficit commission recommends is peanuts compared to taming healthcare costs.”

As the deficit commission nears a crucial vote, it has picked up surprise support from GOP conservatives, including Sens. Tom Coburn, R-Okla., and Mike Crapo, R-Idaho.

If the commission can get to 14 positive votes of 18 members, it would go to Congress for consideration.

Democratic Sen. Dick Durbin of Illinois also endorsed the plan Thursday night.

"Borrowing 40 cents out of every dollar we spend for missiles or food stamps is unsustainable," Sen. Dick Durbin wrote in an op-ed piece in Friday's Chicago Tribune.

"When we engage in the critical decisions about our nation's future budgets, I want progressive voices at the table to argue that we must protect the most vulnerable in our society and demand fairness in budget cuts."

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Economist and former Clinton Labor Secretary Robert Reich says Washington should spend faster, despite the deficit, to save the U.S. economy from plunging back into the red. Most Americans are more concerned about jobs, not the debt, and those jobs are dependent for now on...
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2010-09-03
Friday, 03 Dec 2010 01:09 PM
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