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Galston on the Anemic Recovery

Bill Galston has a very smart article up at the New Republic in which he argues that the reason the economic recovery is so anemic is not, as the Dems suggest, we need more stimulus nor, as the GOP suggests, that taxes are too high, but that in the past couple of decades, Americans became way, way too indebted and that instead of investing in the economy with new purchases, families are still busy paying down debt. Most of that debt is, of course, mortgage related. His conclusion: "I wonder what would happen if the financial wizards whose innovations helped crater the world economy turned their attention to devising a plan for reducing household debt to healthier levels without destabilizing systemically important lenders. One thing, though, is clear: Nothing of the sort will happen unless President Obama and Treasury Secretary Geithner set aside their incomprehensible passivity and fealty to the financial community’s cramped vision and get to work on the problem."
I wonder too. And here is another reason why Obama should think about getting a Treasury Secretary who policy-GPS extends beyond Wall Street.

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