This Obama interview yesterday offers some encouraging signals. He knows he is inheriting a trillion dollar deficit before he even gets started. There is no magic fix here. It will take time to pay down debt and build up savings and financial health again in the economy. But the Obama economics team seems to understand that stimulating sustainable jobs (rather just stimulating more credit) is the path out of the present downturn. Remember how the recovery coming out of 2003 was called the “jobless recovery”? That was because the spending of that expansion came primarily from credit growth, rather than job and wage growth. This time, the Obama team understands that real jobs are needed for this solution. Spending in health care, schools, energy efficiency and infrastructure can all serve to strengthen America over the next many years. Directing government spending at intelligent, enriching causes that will build up assets rather than blow the world up? What a novel concept. This is a start in the right direction.
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