Varian Makes a Case for Private Investments

Hal Varian, Economics professor at UC Berkeley and Google’s Chief economist wrote an Op-Ed in WSJ stating private investments as the cure for economic downturn. This comes from the aggregate demand function that describes national income

National income = Consumer spending + Private Investments + Government spending + Net exports

Increase net exports is a problem when US  is continuing to import oil and cheap products from China and the dollar continuing to be a strong currency. Consumers are tightening belts. The Government spending when done right will work except that it may run into problems related to who will buy the new debts. Varian says private investment is the solution.