Nobel laureate urges spending, tax cuts BY JAMES PILCHER • [email protected] <[email protected]> • OCTOBER 21, 2010
- Comments (8)<http://news.cincinnati.com/comments/article/20101021/BIZ01/10220357/Nobel-laureate-urges-spending-tax-cuts> - Recommend (1)<http://news.cincinnati.com/article/20101021/BIZ01/10220357/1196/NEWS/Nobel-laureate-urges-spending-tax-cuts?goback=%2Egde_55492_member_33742654> - Print this page<http://news.cincinnati.com/article/20101021/BIZ01/10220357/1196/NEWS/Nobel-laureate-urges-spending-tax-cuts?goback=%2Egde_55492_member_33742654> - ShareThis<http://news.cincinnati.com/article/20101021/BIZ01/10220357/1196/NEWS/Nobel-laureate-urges-spending-tax-cuts?goback=%2Egde_55492_member_33742654> - Font size:A<http://news.cincinnati.com/article/20101021/BIZ01/10220357/1196/NEWS/Nobel-laureate-urges-spending-tax-cuts?goback=%2Egde_55492_member_33742654> A<http://news.cincinnati.com/article/20101021/BIZ01/10220357/1196/NEWS/Nobel-laureate-urges-spending-tax-cuts?goback=%2Egde_55492_member_33742654> *UNIVERSITY HEIGHTS* - The quickest way to further stimulate the economy and the fragile recovery from the Great Recession is to cut government spending and taxes on the private sector, a recent Nobel Prize winning economist said during a stop at the University of Cincinnati Thursday. Edward C. Prescott, who won the award in 2004 for his work studying dynamics and changes in macroeconomic cycles, said other countries that have not spent as much on stimulus efforts have fared better than the United States and other western European nations that poured trillions of dollars into such efforts. "To spend is to tax ... and to tax is to depress," Prescott said. "The stimulus in the long run will prove to be a depressant. Countries that did not stimulate using tax dollars like Poland grew and did quite well. But others like the U.S., Spain, Greece ... they are still hurting and will be for awhile." Prescott was in Cincinnati to give the James C. Krautz Lecture in Political Economy. In addition to as an economics professor at Arizona State University, Prescott is the senior monetary policy adviser and researcher for the Federal Reserve Bank of Minneapolis. His research and input has been credited with major policy shifts and independence of central banks in other countries such as Sweden, New Zealand and the United Kingdom. Prescott also has written another book after his Nobel on all of the "Great Depressions" of the 20th century. "This might not be the golden age for the economy, but it is a golden age for economics," Prescott said. "We are learning so much about how things work with what is going on now." On Thursday, he said that the U.S. economy still hasn't started to recover and has only stopped declining. He cited stagnant productivity data and hours worked data from Census surveys - that last figure fell by 10 percent between 2008 and 2009. But he also said that the Federal Reserve did a good job of stemming the crisis, but said governments should "get out of the business of subsidizing inefficiencies." "You need to permit the economy to change naturally and stay out of the way," Prescott said. Prescott added that growth in China is good for the U.S. economy in the long run, pointing out that the massive growth of Japan's economy in the second half of the 20th century actually pushed the American economy to do better. "We will benefit from the dramatic catch up in Asia," Prescott said. "Sure, there are a lot of uncertainties and the political realities are uncertain. But the better China does is better for the U. -- Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more.
