Reading notes

Interview with American Nobel Prize laureate for Economics George A. Akerlof, “recognized for his research that borrows from sociology, psychology, anthropology and other fields to determine economic influences and outcomes.”

SPIEGEL ONLINE: So the government’s just bad at doing the correct math [on tax cut costs/benefits]?

Akerlof: There is a systematic reason. The government is not really telling the truth to the American people. Past administrations from the time of Alexander Hamilton have on the average run responsible budgetary policies. What we have here is a form of looting.

SPIEGEL ONLINE: If so, why’s the President still popular?

Akerlof: For some reason the American people does not yet recognize the dire consequences of our government budgets. It’s my hope that voters are going to see how irresponsible this policy is and are going to respond in 2004 and we’re going to see a reversal.

SPIEGEL ONLINE: What if that doesn’t happen?

Akerlof: Future generations and even people in ten years are going to face massive public deficits and huge government debt. Then we have a choice. We can be like a very poor country with problems of threatening bankruptcy. Or we’re going to have to cut back seriously on Medicare and Social Security. So the money that is going overwhelmingly to the wealthy is going to be paid by cutting services for the elderly.