Sustainable Developments: Needed: A Fiscal Framework; April 2009; Scientific American Magazine; by Jeffrey D. Sachs; 1 Page(s)
The economic debate in the U.S. regarding the fiscal stimulus package centered on ¿bang for the buck,¿ that is, on whether tax cuts or spending increases would produce more jobs. This limited perspective is very misleading, however: the choice of spending versus taxes should turn first and foremost on the purposes of government, or what economists quaintly call ¿the allocation of resources.¿ It¿s silly to debate whether investing in a $100-million bridge creates more jobs than a $100-million tax cut if we need the bridge! The American Society of Civil Engineers has long documented the crumbling state of U.S. infrastructure and the pressing need for $2.2 trillion in investments for our well-being and competitiveness.
Government spending and taxation affect the distribution of income demographically and temporally. America ranks 22nd out of 23 high-income countries in public social outlays as a percentage of national income (ahead only of Ireland) for health, pensions, income support and other social services. Our political discourse tends to focus on the middle class and neglect the poor, whereas our tax and spending policies often benefit the wealthy. As a result, the U.S. has the largest poverty rate, income inequality and per-capita prison population of any high-income nation, as well as the worst health conditions.