August 26, 2011
-- by Dave Johnson
In Is capitalism doomed? Nouriel Roubini writes,
The right balance today requires creating jobs partly through additional fiscal stimulus aimed at productive infrastructure investment. It also requires more progressive taxation; more short-term fiscal stimulus with medium- and long-term fiscal discipline; lender-of-last-resort support by monetary authorities to prevent ruinous runs on banks; reduction of the debt burden for insolvent households and other distressed economic agents; and stricter supervision and regulation of a financial system run amok; breaking up too-big-to-fail banks and oligopolistic trusts.
Over time, advanced economies will need to invest in human capital, skills and social safety nets to increase productivity and enable workers to compete, be flexible and thrive in a globalised economy. The alternative is - like in the 1930s - unending stagnation, depression, currency and trade wars, capital controls, financial crisis, sovereign insolvencies, and massive social and political instability.
I think we also need to start an international effort to reduce population growth. And we need to change the GDP metrics to account for externalization -- harm to environment, health, etc. and add metrics for goding things people want and need, not just growth for its own sake.
Posted by Dave Johnson at August 26, 2011 9:26 AM
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