Areas of agreement
Date posted: September 17, 2012
There seems to be nothing but disagreement over what should be done about the economy. But N.C. State University economist Mike Walden says there are some areas that economists and policymakers agree on.
“I think there are six areas where people of all kinds of viewpoints actually agree in terms of the national economy and policy making.
“One is that the national debt is a problem. And it’s a long-run problem, and we need a long-run solution to it.
“And number two, to get there, we do need a long-run plan for dealing with federal fiscal issues — a comprehensive plan that looks not only spending but also taxes.
“Number three, I think everyone pretty much agrees that certainty … about economic policy is good. It’s not good to make economic policy on the fly.
“Investors, business people, consumers need to know what the future holds in terms of how they’re going to be taxed, what kind of programs that are going to be out there. So, certainty, I think, is another area of agreement.
“Fourthly, simple taxes – simple taxes are better, economists would argue, than complicated taxes. Simple taxes that are easy to understand, easy to calculate, transparent, people know what they’re paying. They have a pretty good idea of what other people are paying. That, I think, creates a lot of competence and agreement with the system.
“Fifthly, low and predictable inflation is certainly preferable to high and unpredictable inflation. That almost doesn’t need comment. But when prices are changing very rapidly again that creates uncertainty.
“And then lastly, I think everyone does agree that government is needed. We need to have government. What people disagree about is what government should do. There are certainly some core functions, protection, some regulations, insuring competition — pretty much everyone agrees government needs to do. Beyond that there is intense disagreement.”
Category: Economic Perspective