Abstract:
In this “Economic Prospects” column for New Labor Forum, Robert Pollin tackles the economic and political issues surrounding the federal fiscal deficit. He questions the media’s alarmism, and instead  looks at the deficit in the context of the total debt burden it entails. Pollin argues that federal spending is a safe and effective short-term approach to stimulate economic growth and employment in targeted activities, as long as policies are developed to control spending in the longer term. He recommends that to curb the deficit over the long term, the federal government should cut military and health care spending and pass a small financial transaction tax.