There Is No Sovereign Debt Crisis

For a high-unemployment country with low borrowing costs?such as, say, the United States?the sensible idea right now is the old-fashioned, liberal one: public works. If there are useful projects to be undertaken and idle workers who could be undertaking them, then borrow money and conduct the projects. Spending on certain types of public works today?accelerated repairs of water and transportation infrastructure, say, or rapid construction of durable military equipment?should save money in the long run. As money becomes cheaper, more projects pass cost-benefit scrutiny. A ?bridge to nowhere? is a tragic waste if it diverts resources from other useful undertakings. If it can be financed at negative real rates and built by construction workers who?d otherwise be unemployed or languishing in positions that don?t take advantage of their skills, it may be a reasonable investment.

Source: http://feeds.slate.com/click.phdo?i=229bbcd1d788db16081d2e11ea8f0ca9

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