Robert C. Hockett, an international finance expert and professor of law at Cornell University, argues that mortgage debt write downs and infrastructure investment are the best tools for economic recovery.
“It is very good news, both for the nation's finances and for the health of the macroeconomy, that the Bush-era tax cuts for incomes over $250,000 are likely at last to expire per whatever package emerges from White House and Congressional bargaining over the imminent fiscal speed-bump.
“It is also good news that at least some of the nation's huge military budget will finally be pared back, while so-called ‘entitlement’ spending that maintains consumer demand and, thereby, growth and employment, will remain free of significant impairment.
“What is astonishing, however, is how the dickering ignores mortgage debt overhang and infrastructure decay – by far the principal impediments to restored economic and fiscal health since 2007. Eliminating mortgage debt through serious principal write downs, and reversing infrastructure decay through serious investment conducted through public-private partnership banks, would between them do far more to boost growth, employment and consequent federal revenue than will anything under discussion right now. Indeed, between the two of them they'd render all 'fiscal cliff' talk unnecessary.”