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Thursday, Jan. 5, 2012

Issue of the Week: Why Government Spending Is Necessary Now

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So why is Wisconsin losing jobs month after month while most of the rest of the nation is beginning to slowly grow their job base? A big part of the problem comes from the Scott Walker-Chris Abele thinking that cutting government spending in the midst of a nascent economic recovery is somehow a good idea. Every legitimate economist, excluding the right-wing ideologue economists, have learned from history and understand what John Maynard Keynes showed so clearly in the 1930s as the world struggled to recover from the Great Depression. When consumers aren't spending, businesses don't expand and hire people and the economy begins to spiral into recession if either exports don't grow dramatically or the government doesn't increase its spending. It's pretty straightforward. It was so clear to everyone that conservative Republican President Richard M. Nixon declared in 1971, "I am now a Keynesian in economics."

However, over the last decade or so, when the "don't let the facts get in the way of my ideology" crowd began to influence policy-makers—especially those who dropped out of college rather than take an economics course—our economy began to hit some rough terrain. This blanket notion that debt is bad is simplistic and dangerous.

Of course excessive debt is not good. But reasonable debt not only is good, it also is essential to grow an economy. How many of the 67% of Americans who own their homes would be homeowners without a mortgage? It was hard enough coming up with the down payment on one's first home, let alone trying to come up with the full selling price.

Government has a different role when it comes to debt. Governments should do whatever they can to stimulate the economy during a recession—including raising taxes on the wealthy—and then adjust their policies when the economy is strongly growing again to avoid inflationary pressures. Walker and Abele are making mistakes that any student of history should understand. Cutting and cutting government in the midst of a recession is only going to make the situation worse. Neither Wisconsin nor Milwaukee County is in serious debt territory, so Walker and Abele shouldn't be fixated on a problem that doesn't exist. The problem is high unemployment—and all of the social issues that high employment creates.

Heroes of the Week
: Volunteers of America of Wisconsin

Volunteers of America is a national nonprofit organization dedicated to helping people "rebuild their lives and reach their full potential." Through its hundreds of programs, which include services for housing and health care, Volunteers of America helps more than 2 million people in more than 400 communities. Since 1929, Volunteers of America of Wisconsin has been serving communities in our state. Today that includes Milwaukee, Waukesha, Kenosha, Whitewater, Clintonville, Waupaca and Manitowoc. Among the services provided are daycare and adoption programs, as well as residential care homes for elderly, developmentally disabled and mentally ill adults.

Volunteers of America of Wisconsin is always looking for individuals willing to help in a variety of capacities. Readers interested in ringing in the new year by volunteering their time to help the less fortunate are encouraged to visit the group's website at www.voawi.org.
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