(Image courtesy: Gary Latanich.com)
During an interview with KASU's Johnathan Reaves, Gary Latanich, a Democrat running for Congress in Arkansas, offered the following advice [paraphrased]: Stop focusing on the national debt. It’s counterproductive. We need to worry about full employment and tax collections and then we can look at deficits and debt.
That was in February. But even though it's months old, it's worth a flashback since the Arkansas primary is just days away. In fact, Glenn Beck got such a kick out of Latanich's past answers to economic question he deiced to to play them this morning.
“The economy, obviously, is in very bad shape and the polices that the Republicans would like us to pursue are only going to make the economy worse. It’s basically going to turn us into the next Greece,” the Arkansas State University economics professor said when explaining why he was running.
Reaves asked the Democrat candidate what he would do to address America’s looming “debt issue.”
“The debt is a difficult subject. Republicans have framed it as ‘the debt is bad.’ And they’re really misunderstanding the entire concept,” Latanich responded.
Debt it one side, assets is the other. The size of the debt is not the problem for us in the short run. During World War II, debt-to-GDP ratios grew much higher and the level of government spending is what took us out of the depression. Today, we’re worrying too prematurely about debt.
We need to get the economy back to full employment and then look at the size of the debt when we have tax collections and at that point decide if there needs to be a long-run change in deficits and deficit reduction. But in the short run, deficits and debt should not be our focus. It’s misguided and counterproductive.
How does Latanich think we should address this issue?
“The best way to address the debt now is to figure out ways to stimulate product demand. Companies are sitting on two trillion dollars in profits. But profits aren’t what drives the economy. It doesn’t drive employment. Employment is driven by product demand. As long as companies don’t see more demand, they won’t hire,” the candidate responded.
“As long as more money is put in the economy and there is more demand, that’s what’s going to move us out of the recession. And when the last person goes to work, that’s when we look at the size of the debt and say ‘Okay, what is the trend path we’re on? Is it sustainable?’ At that point we look at debt but not sooner,” he added.
What's his approach to unemployment? Easy: put the unemployed to work on government infrastructure projects! If you do this, then the economy will expand and companies will eventually start hiring again.
“The government can do this. We have the funds. It’s just a matter of political will,” he said.
Front page photo source: Blytheville Courier News