The repeated economic policy dilemma around the world is growth vs expending. The Post is now more convinced that the political approaches are inadecuate because of lack of consideration of the pragmatic need for self preservation. The world really needs more demand, fueled by government borrowing, to fight mass unemployment within an adaptive mixed economy.
The main division in politics has been between progressive parties who want to expand government and reduce the role of markets, and the conservatives who want to do the opposite - reduce the role of government and expand markets. What this illustrates is the intelectual and institutional inertia that has prevented serious debate about redrawing lines between public and private activities.
The adaptive mixed economy that should be tried is basically the bilateral approach as once described by James Buchanan as "a set of theories of governmental failure to offset against the theories of market failure", he summarized his approach as "politics without romance."
Unmistakably, government cannot afford to neglect its long-term fiscal results, and it needs a more aggressive response than even current versions of a “grand bargain” would provide. Diminution of long-term potential growth is one reason for concern. Another is that a deeply indebted government would have less “fiscal space” for necessary stimulus during a cyclical crisis. There’s also the risk that unreformed entitlements crowd out other priorities and transfer scarce resources from young to old.
To some, such arguments amount to fetishizing “austerity” while the jobless suffer. Actually, the problems of the global economies are not only cyclical but also structural, and pummeling an “austerity” straw man can be a way to avoid addressing the latter.
Food for thought the Post proposes while recommending well thinking : subjectivity simultaneously with the objective.
Fernando Leyva Duran