Sunday, April 10, 2016

Daniel Alpert vs QIRE

As I wrote back then, a five-year $1.2 trillion public investment program in transportation, energy, communications, and water infrastructure would create an additional 5.5 million jobs or more in each year of the program—directly, through the projects themselves, and indirectly, through the multiplier effect on other sectors of the economy. With the American Society of Civil Engineers telling us that our present infrastructure backlog is nearly $2.5 trillion, projects will not be hard to find. And neither will labor. Adding 5.5 million workers (assuming all were new/returning entrants to the labor force) would barely restore the labor force participation rate back to the levels of 2010, still well below levels prior to the recession. - Daniel Alpert, GLUT: The U.S. Economy and the American Worker in the Age of Oversupply

Daniel Alpert thinks that we have economic problems.  And I definitely agree.  However, Alpert's solution is.... more government spending.  I have absolutely no problem with government spending.  But I definitely have a problem with government spending that breaks QIRE.

What does Alpert think about QIRE?  Does he think it's a good rule?  If so, then why does think it's a good rule?  Does he think that there are positive consequences when it's followed?  Does he think that there are negative consequences when it's broken?  If so, then how does he propose to ensure that his solution doesn't result in QIRE being broken even more than it's already being broken?

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