Should the federal government bailout Detroit? That’s the question everyone is debating. We think the discussion should be expanded well beyond this narrow question. Detroit is the canary in the coal mine, but it’s symptomatic of a bigger problem, which is the lack of jobs and decent demand in the economy.
Steve Kraske of The Kansas City Star recently interviewed me for a piece about austerity. The story ran in today’s paper. It doesn’t provide much depth (unlike bloggers, journalists have strict space constraints!), so I followed up with a few comments on the Star’s website. I thought I’d share them here, since I’m always trying to improve the way I communicate these ideas with non-economists. So here’s my best effort to make the anti-austerity case in simple terms.