New York Times editorial off the mark
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Below is a letter we sent to the editors of the New York Times in response to their June 9th editorial defending continued deficit spending.
The perspective championed in your June 9 editorial (“The Wrong Message on Deficits”) is not new. The suggestion that a difficult economic situation justifies any level of deficit spending is both irresponsible and further damaging to an already precarious fiscal and economic situation.
Contrary to “Wrong Message,” experts suggest that excessive debt has a direct, negative impact on job creation. Economist Carmen Reinhart concludes that when debt levels hit 90 percent of GDP or more (the U.S. is at 93 percent), GDP is likely to fall by one percent.
Christina Romer, the White House’s top economic advisor, found one-percent growth in GDP is equivalent to one million jobs. Connecting the dots, debt is slowing down our economy and, hence, job creation.
The argument that spending restraint and debt reduction hinder recovery does not apply when the debt is almost the size of the entire economy.