Tuesday, March 29, 2011

Spend more!

There are something like 25 million Americans unemployed or under-employed, with the attendant misery.  Our national priority should be getting back to full employment as soon as possible, not reducing the deficit right now.  It is disconcerting to hear our president siding with those calling for "belt tightening" and spending cuts.

(Update 4/9/11:  and now we have Obama celebrating the cuts in the budget that will only slow down recovery, and put or keep more people out of work.)

What President Obama would have been saying if he asked me (although his rhetorical skills are better than mine, and the following would be phrased more eloquently):

"There are millions of people already out of work, and every month more people, particularly young people, are beginning the search for their first jobs - and not finding any.  So from now on my first priority is to create as many jobs as I can.  Business is not creating jobs right now - business is investing in new machinery, but is not hiring in sufficient numbers to make enough of a dent in the unemployment rate.  So we have to make a choice:  allow millions to continue a life of unemployment, with the loss of self worth that implies, or else as a people we step up to the plate, and act through our government to do what business will not: provide the millions of Americans now unemployed or under employed the feeling of self worth that comes with useful and gainful employment.  Let us follow the example set by Franklin Delano Roosevelt in the 1930s, when the jobs programs he started lifted millions out of poverty and despair.

It's not that there is no work for millions of Americans to be doing.  The work is there to be done.  Our roads and bridges are falling into disrepair.  We are falling  behind other countries in our development of new energy technologies and new transport technologies. The threat of climate change means we urgently need new non-polluting energy technologies. Our states and cities are laying off workers who provide the services our citizens want and need.  I repeat, there is work to be done, and we need to get to work now getting it done.  So I am today proposing a new works program.  Not a giant increase in federal government employees, but a program of grants to the states to allow them to retain their valued workers, and new contracts for our nation's businesses to repair and upgrade our infrastructure, and develop the 21st century technology that will keep out country competitive, and our economy growing with challenging and well paying jobs.

I hear my opponents say that we should be cutting our massive deficits.  And so we should - once we are back to full employment.  But right now is  not the time - now is the time to put people to work, not be putting more people out of work.  Because that is what "cutting spending" means - putting people out of work, both people who work for your government, and the people who work for businesses that depend on your government buying their needed goods and services.  And as we put people out of work, so their decreased purchasing power ripples through the economy, putting even  more people out of work.  So  no - I will not heed the calls of my opponents to put more people out of work.

I recognize that this new jobs program will add to our deficit and our national debt.  We would be in a much better position now if our debt had not been run up so irresponsibly in the Reagan and Bush years, an irresponsibility I might add that those who call for deficit reduction now enthusiastically supported at the the time the debt was being run up.

So yes, we will now for a period need to responsibly add to our debt.  It is a choice of that or prolonging the sad spectre of unemployment that haunts too many of our fellow citizens.  We also need to look forward to the day when employment is back to normal, when all who want a job, particularly our young people, can find one.  When that day arrives, we need to get serious about stopping the borrowing, and paying down our debt. Yes, that does mean raising taxes to the rates they were before the irresponsible tax cuts of the Reagan and Bush years, their foolish running up of the national credit card, which led to our present sad state of public finance.  And we also need to control the greatest driver of rising deficits, the cost of health care.  The Affordable Care Act has made a start on controlling costs, but we must do more.

But let me repeat: deficit reduction will come later, and yes it will be painful after these binge years of running up the national credit card, but right now, we must get Americans back to the dignity and self worth of valuable employment."

(Update 4/3/11.  The small rise in new jobs in March is being touted as good news.  A useful correction from Dean Baker here.)
(Update 4/10/11:  And the small rise is more than offset by the projected job losses resulting from the budget cuts just agreed to by Obama.)

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