Economics Professor Offers Take on Current Situation
SUNBURY – This isn’t free money . . . That’s the breakdown on President Biden’s ambitious Build Back Better campaign from Valley economist Dr. Matt Rousu.
As Dean of the Sigmund Weis School of Business and Professor of Economics for Susquehanna University, Dr. Rousu said he wonders how much debt the US can sustain, “This money is going to be paid either in taxes or added debt, which, for future generations, generates higher debt and fewer opportunities to do things later. So, if you’re talking about fixing bridges that need to be fixed, like traditional infrastructure, maybe a lot of it should be done. I wouldn’t argue it on economic grounds now.”
While giving the president credit for handling the pandemic much better than Pres. Trump, Dr. Rousu still said he questions Biden’s overall competency and claims the extension of pandemic stimulus programs contributed to inflation, “The unemployment rate was barely over six percent when the February/March bill was passed, so it wasn’t like the economy really needed an extra boost.”
“Then you have a number of people getting thousands of extra dollars and going out and buying things, and that pushes prices up. But, we do know that there are supply chain issues – that’s going to cut the supply down and that would raise prices.”
Dr. Rousu doesn’t completely blame the extra stimulus checks and unemployment compensation for our current worker shortage, “Some of it would be the benefits, some of it is a shift in job type. The pandemic changed the way we do some operations. Some of it might be immigration – if that’s cutting down the supply of workers, that’s going to lead to a worker shortage. The stimulus checks also had a small role in this as well.”
When it comes to getting the national debt under control, Dr. Rousu cautions against drastic measures, “The proponents that say it doesn’t matter, we have unlimited power to tax and you can always literally print – well, neither of those are good things. If you’re taxing more and cutting down spending, you can pay down the debt, but then people have less money to spend or you’re cutting down services. If you’re using your power to print, that simply leads to inflation.”
Visit our podcast page to hear Dr. Rousu’s entire On The Mark interview and the conversation it generated.