Jeffrey Sachs, a professor at Columbia University, wrote a March 21, 2013 article in the New York Times in which he advocated a three-pronged solution to the United States’ economic problems. Before proposing his solution, he noted that technology and globalization are exerting increasing pressure on workers, especially low-skilled workers. He believes that the Republican mantra of “cut taxes, decrease spending” is just as ineffective as the Democrats’ call for short-term stimulus programs such as the American Recovery and Reinvestment Act of 2009 (often referred to as “the stimulus bill”).
The first aspect of the solution Sachs proposes would be infrastructure spending for a sustained period of time, such as 10 to 20 years. Sachs believes that this period of time is preferable to short-term projects because the private sector is much more likely to get involved when the projects span years. Highway renovation and construction of subways in cities are just two examples of projects that infrastructure spending could address.
Second, Sachs advocates similar government spending on developing low-carbon energy sources such as solar, wind, and nuclear. Third, he suggests the U.S. follow the German model of teaching jobs skills through apprenticeships with businesses.
Sachs is optimistic that government spending could heal the American economy, pointing to the role government investment played in developing the Internet and the space program. But additional government spending will add to historically high deficits and, at least in the short-term, will worsen the country’s fiscal trajectory. In addition, his championing “green” energy sources by discounting shale gas as an energy supply that will soon be exhausted runs counter to the claims of many energy experts.