|Protesters offer their suggestions to try and close the 13 billion budget gap|
Donahue's whole piece is premised on the conservative framework that we need to cut, cut, cut our way out of our fiscal mess, rather than growing the economy. So he's pretty much stymied when this guy on the street, who clearly knows far more about economics than Donahue, gives him a quick lesson in Keynesian theory. Donahue's schtick pretty much stops dead.
Paul Krugman and Digby have both been writing lately about the counterintuitive nature of Keynes's theories: when you're out of money in your household, you cut back, so why shouldn't the government do likewise?
The answer, of course, is that the government is not a household, and that the government should be creating economic activity in the absence of activity in the private sector. And if you're worried about closing deficits, the economic growth you create from smart, targeted government spending will jump start the economy and create more wealth, from which you can draw tax revenues later.
Which is why I think Christie is absolutely right to NOT pay into the teachers' pension fund right now; we NEED to go into debt. Of course, using the savings to give tax cuts to millionaires is a horrible form of stimulus...
This is stuff that the media should at least be putting on the table as a legitimate position to debate.