And it is monetary. Will there there continue to be demand for financing our debt at the levels we are approaching? Due to how much we depend on foreign investment, one wise path might be to let our economy contract and focus instead on getting our monetary and fiscal institutions in order. The argument against Obama's plan is that it exacerbates monetary risk.
This argument to me is strong. For example, there is no plan to pay for the stimulus. In fact, it includes new tax cuts. According to Bloomberg yesterday, the Treasury is planning to incorporate three times as much debt in 2009 as in 2008. The question is not, where will the money come from. The question is, will we continue at these debt levels to get the financing we need? This question, and these factors, are considerable.
But in the end, I support the stimulus for the way it invests in key economic institutions: education, health, infrastructure, jobs, etc. It helps move private action away from a finance model toward a productivity model. This structural shift, stimulated by the Obama plan, will help stabilize the economy by offering new means of growth while we de-leverage from those incredible levels of credit that just collapsed. The plan invests in the American consumer, which, in economic terms, is the primary asset on the nation's balance sheet. Finally, I support the plan knowing the possibility that, to pay for this, we will have to raise taxes and interest rates in the medium term and, once again, put our house in order.