I had dinner this evening with two Harvard undergraduates. I asked how they felt about our government borrowing trillions of dollars that they would have to pay back. “It’s a good time to be in school,” they responded. What did they expect would bring the U.S. out of this depression? “When Americans realize how tough it is going to be, they’ll start working a lot harder. I spent last summer working in a lab in India. The Indians worked much harder than any American because it is much more competitive over there.”
This might be a more sensible explanation of how we might plausibly return to economic growth than anything that I’ve heard from politicians or economists.
[Alternatively, the kids could get jobs as public school teachers upon graduation. This New York Times article talks about the lives of some teachers in the Rochester, NY public schools, which has doubled its real-dollar payroll expenses over a couple of decades even as the student achievement has continued to slip. The Times story concentrates on the benefits enjoyed by the unionized public employees and doesn’t mention the fact that the schools are considered failures and that an employer would find an ample supply of better educated workers in most parts of Mexico, India, and China.]