Economic Prospects New Labor Forum • 137 But we cannot get excessively enthusiastic about government deficit spending. Whether large-scale fiscal deficits are a positive economic force depends on whether, at any given time, there is a large amount of underutilized productive equipment and underem-ployed people that can be put to work when the government injects increased spending into the economy. It also de-pends on how much debt the government is already carrying. Remember that the other side of government deficit spend-ing is that these are debts taxpayers owe to mostly rich people and foreign gov-ernments. These debts need to be paid back with interest. As a general principle, it is preferable for the rich to pay their taxes like everyone else—thereby raising government revenue and reducing the need for government borrowing—rather than enabling the rich to idly collect interest on their government loans. As I tried to show in my article in the fall
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This note was uploaded on 11/07/2011 for the course ECON 104 taught by Professor Dolenc during the Fall '08 term at UMass (Amherst).