{"id":17167,"date":"2016-07-15T12:07:01","date_gmt":"2016-07-15T16:07:01","guid":{"rendered":"http:\/\/peterlevine.ws\/?p=17167"},"modified":"2016-07-15T12:07:01","modified_gmt":"2016-07-15T16:07:01","slug":"hillary-clinton-on-spending-for-infrastructure","status":"publish","type":"post","link":"https:\/\/peterlevine.ws\/?p=17167","title":{"rendered":"Hillary Clinton on spending for infrastructure"},"content":{"rendered":"

There\u2019s an important exchange about government spending in Ezra Klein\u2019s long, wonky interview<\/a> with Hillary Clinton.<\/p>\n

Klein notes that the government can currently borrow very cheaply, paying virtually no interest. The US has\u00a0grave infrastructure needs. Businesses normally borrow in order to invest: they don\u2019t pay for a new factory the same\u00a0year they open it. So why shouldn\u2019t the feds accept the markets\u2019 offer of \u201cfree money?\u201d \u201cShouldn\u2019t we be doing more deficit spending for infrastructure, for middle-class tax cuts\u2014and worrying less in the near-term about deficits?\u201d<\/p>\n

Paul Krugman recently put<\/a>\u00a0the same case even more\u00a0forcefully. \u201cPolicy makers should be \u2026 accepting the markets\u2019 offer of incredibly cheap financing. \u2026 America\u2019s aging infrastructure is legendary. \u2026. So why not borrow money at these low, low rates and do some much-needed repair and renovation?\u201d<\/p>\n

Clinton responds to Klein that our infrastructure needs are great, and we should \u201clook for ways to pay for our investments. \u2026 But I\u2019m not going to commit myself to [borrowing] \u2026 because I think we\u2019ve had a period when the gains have gone to the wealthy. \u2026 I think we can pay for what we need to do though raising taxes on the wealthy.\u201d<\/p>\n

Klein summarizes her answer: \u201cI\u2019ve not heard you say it that way before. So part of the argument of doing pay-fors in the near term is not just balancing the budget or reducing the deficit but also bringing distributional fairness to the aftermath of the recession.\u201d<\/p>\n

If liberals could design and implement a coherent policy, they should borrow now to take advantage of the rock-bottom interest rates, and structure the repayment so that upper-income people bear the costs over time. But Clinton is not in a position to write and implement a multi-year policy all by herself. If she can do anything at all, it will have to be a compromise with Republicans in Congress. Her view is that she can get more infrastructure spending and tax equity by paying for everything right away, with some kind of surplus tax on the rich.<\/p>\n

I respect her expertise\u00a0and don\u2019t have any desire to argue with her about economics, but I wonder: 1) How much revenue can really come from upper-income tax increases next year, given the political balance? Couldn\u2019t we get a lot more money by\u00a0borrowing? 2) Politically, will voters support a tax-and-spend program, given their extremely low trust in government to create jobs? And 3) Shouldn\u2019t we be challenging the widespread assumption that good government requires never borrowing to make\u00a0investments?<\/p>\n

(See also “why Hillary Clinton appears untrustworthy<\/a>,” in which I proposed\u00a0that her failure to argue for infrastructure spending exemplifies a general tendency among technocratic liberals to refuse to say what they believe because they don’t trust the American people to understand or accept their\u00a0reasons.)<\/p>\n","protected":false},"excerpt":{"rendered":"

There\u2019s an important exchange about government spending in Ezra Klein\u2019s long, wonky interview with Hillary Clinton. Klein notes that the government can currently borrow very cheaply, paying virtually no interest. The US has\u00a0grave infrastructure needs. Businesses normally borrow in order to invest: they don\u2019t pay for a new factory the same\u00a0year they open it. So […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[32],"tags":[],"class_list":["post-17167","post","type-post","status-publish","format-standard","hentry","category-2016-election"],"acf":[],"_links":{"self":[{"href":"https:\/\/peterlevine.ws\/index.php?rest_route=\/wp\/v2\/posts\/17167","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/peterlevine.ws\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/peterlevine.ws\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/peterlevine.ws\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/peterlevine.ws\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17167"}],"version-history":[{"count":4,"href":"https:\/\/peterlevine.ws\/index.php?rest_route=\/wp\/v2\/posts\/17167\/revisions"}],"predecessor-version":[{"id":17171,"href":"https:\/\/peterlevine.ws\/index.php?rest_route=\/wp\/v2\/posts\/17167\/revisions\/17171"}],"wp:attachment":[{"href":"https:\/\/peterlevine.ws\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17167"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/peterlevine.ws\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17167"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/peterlevine.ws\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17167"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}