At the risk of sounding like two old drunks arguing in a bar, I'll go one more round with Ed on the investment versus austerity question. Perhaps I haven't made my point clearly. I don't think we should make new investments to stimulate the economy without an agreement to address the debt. This is the grand bargain I discussed this morning, and it reflects what I believe is the essential, two-step process to economic recovery.
We have to stimulate our economy and cut the debt. In fact, I suggested a bargain in which debt would be tied to a percentage of GDP, allowed to be higher in times of economic distress and required to be lower during times of economic growth. I also said new government stimulus could not be enacted unless and until long-term debt reduction is agreed to.
This strikes me as a better idea than others I have heard from the Republicans, and I got a C in one year of college economics. I am in full agreement that the debt is not sustainable, but that crisis will only worsen if our economy doesn't recover. We cannot cut our way back to prosperity. I also agree that government spending is an often inefficient way to spur economic growth. But what other source of investment do we have right now? The theory is that enough public-sector spending will get our economy growing enough that the private sector can take over. We almost got over the hump with the first stimulus package, but not quite.
Finally, I think an agreement along the outline above will go a long way to restoring confidence in our economy and help spur the private sector to be the engine of growth once again.