Letters to the Editor - Feb. 6, 2008

Keynes had the right idea about recession

On Jan. 17, 2008, the Register-Guard published an editorial by Harold Meyerson dealing with the forthcoming recession and to best deal with it.

Meyerson suggested all those books by J. Maynard Keynes be dusted off, especially the parts where Keynes suggested that to deal with a recession, a government should increase government spending and cut taxes. Keynes was very specific about the type of government spending which would be helpful such as building dams, roads and bridges which are labor intensive. This increase in employment would lead to an increase in demand for consumer goods and business would invest in capital goods and hire more workers to meet this increase in demand.

In terms of tax cuts, Keynes suggested tax cuts for the less affluent instead of the rich (as has been the policy of the Bush administration). Keynes felt that income received from such government infrastructure projects would be spent on consumer goods producing what Keynes called a multiplier effect as each person or business who received these payments will in turn use the extra or marginal income to buy more consumer goods and, therefore, produce an impact on the economy in excess of the initial tax cut or increase in government spending.

So what can we do? I would suggest contacting Congressman DeFazio who chairs the House Transportation Committee and State Representative Terry Beyer who chairs a similar committee in Salem and ask them to use their influence to spend more money repairing our bridges, a number of which are unsafe. This would help our economy and safety as well, and J. Maynard Keynes would be be pleased to be dusted off again!

G. Dennis Shine
Springfield