More spending will prolong the recession


The following letter is in response to UCB School of Law Dean Christopher Edley’s op-ed:

Christopher Edley’s proposal (“Let Treasury Rescue the States,” July 7) fell short of a realistic solution to current fiscal hurdles. In claiming that states could pay back the U.S. Treasury by accepting less future federal dollars, Edley failed to address how existing programs would be paid for were funds advanced for other purposes. The answer is in the form of higher taxes or spending cuts, a scenario he claims would undermine the federal stimulus. He further claims that states would repay the Treasury including interest with no expense to the federal government. Yet he fails to explain that the expense would instead be felt by increased taxes to pay interest. Ultimately, Edley’s premise that extending current recovery efforts can improve the economy is flawed. If Edley wants the suffering expedited, he will abandon his opposition to balanced budgets and instead favor free-market solutions, including decreasing debt and spending.

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