Re "Forget the "fiscal cliff,'" Opinion, Dec. 21
Professor Stephanie Kelton provides one of the most bizarre pieces of economic analysis I have ever encountered to justify deficit spending as a tool to stimulate economic recovery.
She points to a historic correlation between periods of balanced budgets and the onset of depressions and draws the conclusion that balanced budgets and surpluses harm the economy. She provides no economic explanation for why this should be so, yet she quickly jumps to her main conclusion that therefore deficits must help the economy.
In fact, each depression has its own unique set of causes, mostly unrelated to the government's prior fiscal position.
Kelton also misstates the basic linkage between spending and job creation, which should read: income creates spending, spending creates sales, sales create jobs and jobs create income.
Dennis J. Aigner
The writer is a professor emeritus of economics and management at UC Irvine.
I might agree with Kelton in a number of respects, but my view is tempered by more than macroeconomics.
We have a mixed economy that provides private goods and public goods. Many of the latter bestow private benefits, which often fuels the myths and misgivings about public spending. But there is a real demand for public goods.
Right-wing commentators deride the use of the word "investment" when it is applied to public spending. In fact, most of our successful public spending projects have been investments in the true sense of the word. They return benefits in the future, tangible and intangible.
So we need to more wisely prioritize what deserves heavy public spending. It doesn't help us when public officials abuse travel allowances or when opportunists defraud Medicare. The excesses only serve to fuel the misguided myths that trouble Kelton.
Thank you for publishing Kelton's explanation of the "fiscal cliff" and the need for deficit spending. It is sad to see Americans quarreling over whether to cut off one or two of their fingers to avoid cutting off a whole arm.
Letters: The NRA vision for America
Letters: An atheist's Christmas spirit
Letters: U.S. money for mass murder