The post Jeffrey Sachs on how to heal our economy appeared first on Occasional Planet.
]]>In a recent article in the The Huffington Post, economist Jeffrey Sachs confirms what many of us fear—that we could be facing a double-dip recession. But he has some positive ideas about how to turn our economy around. He recommends a new approach to recovery, one that transcends the current polarized debate about austerity to bring down the deficit vs. stimulus to boost consumer spending. According to Sachs, we need to move our attention to “long-term investment in physical and human capital as the proper way to sustained growth.”
Sachs points out that the Obama administration’s short term approach, driven by the two-year election cycle, has been to aggressively promote car and home sales, through rebates and tax incentives to increase consumer spending. But exhausted and anxious consumers are choosing to save and pay down debts—that is, if they are not unemployed and burning through their savings. The stimulus, although successful in stemming job loss and improving infrastructure, was half of what it needed to be. Overall, Sachs feels the administration’s interest in boosting long-term investment has been haphazard at best.
“At a time when China is building hundreds of miles of subway lines, tens of thousands of miles of highways, a couple of dozen nuclear power plants, and a network of tens of thousands of miles of high-speed intercity rail lines, the US struggles to launch a single substantial project. China saves and invests; the US talks, consumes, borrows, and talks some more. . . .Businesses, for their part, are distressed by the lack of direction “
According to Sachs, both Republicans and Democrats are guilty of “irresponsible short-termism” and lack of forward thinking. He offers a proper US investment recovery plan that has five parts:
Jeffrey Sachs, is an economist and a professor at Columbia University, Special Advisor to United Nations Secretary-General Ban Ki-Moon, and the founder and co-President of the Millennium Promise Alliance, a nonprofit organization dedicated to ending extreme poverty and hunger. He has authored numerous books, including The End of Poverty and Common Wealth, both New York Times bestsellers. He has been named one of Time Magazine’s “100 Most Influential People in the World” twice, in 2004 and 2005.
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