Public Spending Still Key to Economic Recovery

Sunday 03 January 2010
by: Mark Weisbrot | The Center for Economic and Policy Research

There are right-wing voices claiming that the government is an obstacle to economic recovery in the United States, irresponsibly piling up debt, burdening future generations, and ruining the investment climate. For them, we only need to rely on the private sector to get us out of our worst slump since the Great Depression.

It should be recalled that it was the excesses of the private sector, and especially the financial sector, that caused this economic collapse. To the extent that the government is responsible, it is that it failed to contain these excesses, and allowed an $8 trillion housing bubble to accumulate without so much as a simple warning to the public. This made a serious recession inevitable.