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OUR COMING RECESSION….Ezra Klein is annoyed with pundits who think we need to cut back on spending programs because we’re about to devote $700 billion to bailing out Wall Street:

The underlying presumption here is that during a recession, faced with heavy spending, the president will have to cut his investment agenda. It makes a certain amount of intuitive sense. In hard times, families cut back. But the government is not a household. In hard times, it should spend more in order to stimulate the economy. That’s part of the utility of having a government: When consumers and businesses fall on hard times, they cut spending. Which cuts demand. Which cuts economic activity. Which deepens your recession. All that is a bad Thing. So it’s useful indeed that we have an institution able to amp up spending in order to increase demand.

….A better question would take Keynesian economics a bit more seriously. Rather than asking what spending the candidates should give up, the question is which items they should prioritize. In theory, you now want to focus on policies that will create a rapid, short-term boost. This might cut towards a tax rebate and against infrastructure development, or towards green investment and away from health reform. But a recession does not cut against government spending. In fact, it does quite the opposite, and it’s a real problem that our political system seems content to lazily assume otherwise.

Right. Monetary policy doesn’t have much bite left, so fiscal stimulus is our best bet for boosting consumption and keeping the coming recession shallow. Unfortunately, one of our biggest problems right now is that we also have a large and growing current account deficit. We consume way more than we produce, and our consumption is financed by the Chinese, the Saudi Arabians, and our other fine overseas friends. This can’t go on forever, and if we don’t do anything about it ourselves, these fine overseas friends will eventually do something themselves. That would be painful in the extreme.

So here’s my question. I don’t think any real economist has ever addressed any of the questions I’ve ever posted on this blog, so I should probably just give up, but here it is anyway: Should we try to stimulate our way out of the coming recession? If so, how much and for how long? Or should we instead concentrate on reducing consumption, boosting exports, and getting our house in order before someone gets it in order for us? Can we somehow do both? Inquiring minds want to know.

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IT'S NOT THAT WE'RE SCREWED WITHOUT TRUMP:

"It's that we're screwed with or without him if we can't show the public that what we do matters for the long term," writes Mother Jones CEO Monika Bauerlein as she kicks off our drive to raise $350,000 in donations from readers by July 17.

This is a big one for us. So, as we ask you to consider supporting our team's journalism, we thought we'd slow down and check in about where Mother Jones is and where we're going after the chaotic last several years. This comparatively slow moment is also an urgent one for Mother Jones: You can read more in "Slow News Is Good News," and if you're able to, please support our team's hard-hitting journalism and help us reach our big $350,000 goal with a donation today.

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