Economic ProspectsNew Labor Forum • 137But we cannot get excessively enthusiasticabout government deficit spending. Whetherlarge-scale fiscal deficits are a positive economicforce depends on whether, at any given time,there is a large amount of underutilizedproductive equipment and underem-ployed people that can be put to workwhen the government injects increasedspending into the economy. It also de-pends on how much debt the governmentis already carrying. Remember that theother side of government deficit spend-ing is that these are debts taxpayers oweto mostly rich people and foreign gov-ernments. These debts need to be paidback with interest. As a general principle, it ispreferable for the rich to pay their taxes likeeveryone else—thereby raising governmentrevenue and reducing the need for governmentborrowing—rather than enabling the rich toidly collect interest on their government loans.
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