08/18/2011 10:21 am ET Updated Dec 06, 2017

Economist: Debt Is Good (AUDIO)

University of Texas Economist James Galbraith tells NPR that government debt and federal deficits are good things that create jobs and help the economy recover.

By spending money, he says, the government provides funds to households and businesses in the private sector, which need it in the aftermath of the financial crisis of 2008. What's more, with the government's cost of borrowing at record lows, increased government spending will actually narrow the deficit as economic growth spurred by government spending boosts tax revenue.