Also in this playlist...
This transcript is automatically generated
From soccer the stimulus your guest now says our stimulus spending spree may have a bit of a dark side.
It is spending without creating new jobs or help us grow the economy -- paid out huge debt levels in the future.
Thomas Cooley is a professor of business at York university and co editor of the forthcoming book.
Regulating Wall Street professor welcome good to see you thank you -- I'm gonna -- the World Cup.
Don't worry -- as the correct answer -- What do you think about stimulus why do you say there's a distinct dark side.
Well there's a dark side because the time comes when you can.
Have more stimulus you can't use more borrowing against the future.
Generations I know -- -- -- -- dress there's a lot of cotton available for the for the dollars we have a big pretty impressed but some day you have to pay the bill.
And the -- thing about stimulus is that governments get to use the assets of future generations.
To -- to try to stimulate the economy in the -- right.
Debt gets a bad name debt is not always a bad thing if your company that -- -- hundred grand in revenue and you can borrow another hundred grand to get 300 -- revenue boggling new factory.
That's a good use of debt that's correct.
And will this debt.
Eventually be a good.
Well it doesn't seem to have been so far it seems that what we've done so far is use the stimulus.
Mainly to avoid adjustments that we have to make.
So a lot of the money you went for kind of silly programs like cash for clunkers that just.
Substituted people's decisions over time.
Home buyer tax credit from I would have thought -- all right anyway.
And a lot of funds went to states and local governments -- that that -- them to avoid the fiscal realities that there.
Now having to confront.
It sounds like a lot of the money may be a majority of the money.
Is not being used to create programs.
That will pay for themselves create new jobs that will enable us to.
Drew grow revenue and draw any taxes on that revenue to pay them well I think that's correct I mean there are good ways.
To spend money that can generate jobs in the long run education.
People's health these are things that arguably in the long run lead to new jobs and economic growth but these short term.
Window dressing kinds of projects that we've seen far too many really don't have the kind of impact.
That the government promised.
You know we're gonna do something in the 1 o'clock show on so called keynesian and point right without getting -- walkie basically just are simple inability.
As a goal not just America to pay down all the debt that we've got up.
Well I think what's happened in Europe which is that true debt crisis.
Has been a useful.
Canary in the coal mine for the US.
We can avoid our problems for a while but we can avoid them forever and I think.
Markets and individuals households.
Are far more sophisticated about that than politicians are they understand what's coming.
And I think one of the problems is that they don't know.
What the plan is going to be for addressing deficits pretty scary stuff.
How do we get out.
Well you know their -- you do there are only two things you can do you can spend -- you can collect more.
But there are lots of variations on that -- you can reform the tax system.
To make it more efficient we are going to have to raise more taxes but we do want to think about how we do that in the most.
Professor Thomas Cooley at NYU professor is a pleasure I think.
Hide under a rock now at a strategy fair game but it's great.
Filter by section