Campaign for America’s Future’s 2010 Reagan Revolution Home To Roost series, especially the post Reagan Revolution Home To Roost — In Charts described the beginning of the great decoupling of the American economy from the middle class.
Conservative policies transformed the United States from the largest creditor nation to the largest debtor nation in just a few years, and it has only gotten worse since then.
Europe’s economic depression has now lasted longer than the Great Depression of the 1930s. Meanwhile, America’s “Great Recession” also drags on thanks to cutbacks in government spending since the stimulus.
Europe’s leaders somehow were convinced that austerity – “deficit reduction” through cutbacks in government – would somehow lead them out of their economic doldrums. They believed that taking money out of the economy would help the economy. The result has been terrible. The Washington Post’s Wonkblog calls Europe’s austerity-lengthened depression “one of the biggest catastrophes in economic history.”
To top it off, Europe’s governments are learning that cutting back on spending not only worsens the economic picture, causing terrible unemployment, poverty and human misery, but the worsened economic picture means less revenue coming in, thereby increasing deficits instead of lowering deficits. In other words, austerity cutbacks to fight deficits have instead made deficits worse and hurt people.
Problem: Your right-wing brother-in-law is plugged into the FOX-Limbaugh lie machine, and keeps sending you emails about “Obama spending” and “Obama deficits” and how the “stimulus” just made things worse.
Solution: Here are three “reality-based” charts to send to him. These charts show what actually happened.
Government spending increased dramatically under President Bush. It has not increased much under President Obama. This is just a fact.
Note that this chart starts with Clinton’s last budget year for comparison.
This video helps you understand that the country is not “broke” but has PLENTY of money to hire people, fix infrastructure, etc., just like how we had enough money for two wars and then trillions to bail out the banks. PS It’s called “Modern Monetary Theory.”
From her website: Stephanie Kelton, Ph.D. is Associate Professor and Chair of the Department of Economics at the University of Missouri-Kansas City. She is also Editor-in-Chief of the top-ranked blog New Economic Perspectives and a member of the TopWonks network of the nation’s best thinkers. Her book, The State, The Market and The Euro (2001) predicted the debt crisis in the Eurozone, and her subsequent work correctly predicted that: (1) Quantitative Easing (QE) wouldn’t lead to high inflation; (2) government deficits wouldn’t cause a spike in U.S. interest rates; (3) the S&P downgrade wouldn’t cause investors to flee Treasuries; (4) the U.S. would not experience a European-style debt crisis.
If you want more, Stephanie Kelton has also participated in a number of Virtually Speaking episodes.
You hear often that we “live in a global world now.” You hear that “globalization” means we have to drop our wages and standards to match those in impoverished, Third-World countries. You hear that the “cost” of controlling pollution makes us uncompetitive in the world. Etc. Etc. Etc. It’s inevitable – a force of nature – so don’t fight it, they say. This is endlessly repeated as if we weren’t in a “global” world when the first camel crossed a border or the first sailing ship crossed a sea. But since that first camel countries have enacted policies to make things better for their people.
Sunday’s New York Times published an op-ed, “The Myth of Industrial Rebound,” by Steven Rattner, one more wealthy Wall Street executive who revolved through the door from being an Obama administration official after he revolved through the door from being a Wall Street executive. In his op-ed Rattner accurately describes many of our economy’s problems but concludes that we should let these things just happen to us because, “In a flattened world, there will always be another China.”
Rattner points out that many of the new manufacturing jobs are low-wage. “This disturbing trend is particularly pronounced in the automobile industry. When Volkswagen opened a plant in Chattanooga … the beginning wage for assembly line workers was $14.50 per hour, about half of what traditional, unionized workers employed by General Motors or Ford received.” Meanwhile, “in Germany, the average autoworker earns $67 per hour. … Volkswagen has moved production from a high-wage country (Germany) to a low-wage country (the United States).”
Rattner is correct that falling wages are slowing economic recovery. “These dispiriting wage trends are a central reason for the slow economic recovery; without sustained income growth, consumers can’t spend.”
Guess who is one of the biggest employers of minimum-wage employees? Your own federal government. After years of “privatization” and outsourcing, the government now contracts out a lot of work to companies that pay really, really low wages for jobs that when they were “government jobs” used to provide good pay and benefits. And this means that a lot of people – between 1 and 2 million – have to live in poverty. Now there are reports that President Obama is considering doing something about that.
An August, 2013 New York Times editorial, “The Government as a Low-Wage Employer,” explained the problem:
Recent studies have shown how hundreds of billions of dollars in federal contracts, grants, loans, concessions and property leases currently flow to companies that pay low wages and provide few if any benefits, even as executive pay among federal contractors has risen. In effect, tax dollars are being used to fuel the low-wage economy and, in the process, worsen inequality.
The links in that paragraph point to a National Employment Law Project (NELP) report, “Taking the Low Road: How the Federal Government Promotes Poverty-Wage Jobs Through its Contracting Practices, A Survey of Workers and Their Stories” and Demos study, “Underwriting Bad Jobs: How Our Tax Dollars Are Funding Low-Wage Work and Fueling Inequality.”
Republicans are engaged in yet more hostage-taking obstruction. (Whatever gave them the idea that hostage-taking can work?) They are engaged in a filibuster of the effort to extend unemployment insurance, using it as a hostage to try to get even more cuts to the things government does to make our lives better. Their “pay-for” demand is really a demand for Democrats to agree to even more economic sabotage.
Senate Republicans Monday continued to fight Democratic efforts to pass an extension of federal unemployment insurance benefits for people who have been out of work longer than 26 weeks. Traditionally our government has provided this assistance to unemployed workers at times of high unemployment. This is an “automatic stabilizer,” meaning that this assistance helps stop the downward spirals that occur when business hit recession. Unemployed workers aren’t forced to pull back from paying mortgages or rent, or buying food and other basic needs, which then causes even more unemployment.
Many feel this economic stabilization effect is the reason Republican oppose the extension. They suspect Republicans want the loss of this assistance to cause more layoffs, foreclosures and economic hardship. This way the economy looks worse as the 2014 elections approach, and voters will turn on what they perceive as the “party in charge” – namely the Democrats.
By requiring “pay-fors” – cuts somewhere else – in exchange for allowing this assistance to the unemployed, they are removing the economic boost that the program provides, causing damage to the economy. In other words: they are engaged in economic sabotage.
One such proposal from Republicans is to stop working people with disabilities from claiming both Social Security Disability Insurance and federal unemployment benefits. Cutting this really means preventing people with disabilities from taking the risk of going out and working to see if they can get off of disability. Michael Hiltzik writes about this at the Los Angeles Times in “An awful idea: Hammer the disabled to pay for unemployment benefits”:
It uniquely burdens the disabled among all workers, and it sets a terrible precedent of raiding Social Security to pay for other social programs.
… The idea that disabled persons are “double-dipping” by collecting wages or other compensation while also getting a disability check is enshrined in conservative attacks on disability. But it’s untrue. The Social Security disability program is designed as a bridge to full employment. Its benefits aren’t intended as a substitute for wages, but a supplement.
Michael Tomasky writes about the hostage-taking involved here in “The Fight Over Unemployment Benefits Underscores the Right’s Extremism” at The Daily Beast:
Republicans are insisting on cuts from elsewhere in the federal budget to pay for the benefits’ $6.4 billion cost. And Democrats are talking with them. But there’s no progress yet. In fact, it seems today that even the six Republicans who voted in the Senate last week to allow debate to proceed would not vote to extend the benefits just yet.
[. . .] if Democrats win, great. But it looks like they’ll only win by agreeing to the pay-for demand, which means that there’ll be new demands next time. There’s no end to how far right these people will go.
Richard Eskow (who really should have a column in the New York Times) writes about the economic sabotage of “pay for” in “No, Congress, You Shouldn’t “Pay For” Extending Unemployment Insurance”:
The simple truth is, Democrats are still being outmaneuvered by Republicans on economic policy. They’re letting the GOP call the shots, rhetorically, even though Republicans lost two out of three seats of federal government (the Senate and White House). They even lost the total popular vote for the House of Representatives.
… Here’s a better idea: Don’t try to pay for extended unemployment benefits. Don’t boast, as Reid did last week, that the extension is “entirely paid for.” Sure, Democrats will eventually need to make a deal – if they can – in order to extend unemployment insurance benefits. But why aren’t they first making the case against “paying for” those benefits on the Republicans’ terms?
Why aren’t Democrats instead speaking up against the “pay for” logic that gives a free pass to the wealthy and corporations – especially when the total cost is a blip, a rounding error, on a $1 trillion 2014 federal budget?
Economically, “pay for” is a Catch-22: It means every job-creating proposal must be offset with job-killing cuts elsewhere.
5 Reasons To Extend Unemployment Insurance
The AFL-CIO Now blog offers “5 Reasons Congress Must Extend Unemployment Insurance.” (Click through for details, charts and links.)
1. The long-term unemployment rate is higher than ever before.
2. The typical unemployed worker has been out of work longer than ever before.
3. More unemployed workers are running out of benefits than ever before.
4. The unemployment rate remains unacceptably high.
5. There are still three job seekers for every job opening.
Call To Action
The Coalition on Human Needs wants us to “tell your senators to renew federal unemployment insurance now, before the next recess, and don’t tie renewal to harmful amendments like denying the Child Tax Credit to low-income immigrant families or denying aid to unemployed workers with disabilities.”
If you haven’t called your senators yet (or even if you have!) please call 1-877-267-2485 (Toll Free). (Thanks to AFSCME for making this toll-free number available.)
In case you missed it (ISYMI) or haven’t read it yet, here is the article in Rolling Stone that is causing a massive right-wing panic. It’s being talked about a lot. Be sure to read it.
Federal unemployment assistance for 1.3 million people who have been unemployed longer than 26 weeks expired last Saturday, after Republicans blocked efforts to extend them. 3.6 million more people will lose these benefits over this year. Restoring these benefits is a moral, economic and political imperative.
On Monday the Senate will hold the first procedural vote on bringing back unemployment benefits for people who have been out of work longer than 26 weeks. The hope is to break a Republican filibuster so the extension can be passed and sent to the House (where Republicans will likely refuse to even allow it to come up for a vote).
A Moral Imperative
When the financial crisis hit the country provided assistance to (“bailed out”) the largest banks. We have a moral imperative to also help our fellow citizens. A democracy provides assistance for people who need help. A fair and just society provides assistance for people who need help. A moral society provides assistance for people who need help.
Have you ever wondered why an economist would say that giving tax cuts to the rich makes the economy better? Or why they say that getting rid of unions is good for the economy?
Watch this to learn why some economists say things like this:
Rachel Maddow shares details of a report showing Koch brothers funding behind an economic report flattering to conservative economic policies.
At the beginning of November, the poor went over the “Hunger Cliff” as Food Stamps were cut. Now long-term unemployment assistance will run out at the end of December. Regular people think the government has given up on them. They have been hit by one blow after another, with little or no help in sight. They see shutdowns and budget cuts at the very time the government needs to spend more to help Americans.
This is part of the Republican effort to turn Americans against government, because the public will blame Democrats. Democrats have to stop letting Republicans get away with it, and return to being seen as trying to help the unemployed and poor.
Long-Term Unemployment Assistance Running Out
In a few days, long-term unemployment benefits run out in spite of a “budget deal.” This cutoff of long-term aid means that in most states aid will end after a person is unemployed for 26 weeks, and in other states even less – some dramatically less. It occurs at a time when the average length of unemployment is 37 weeks, and there is still only one job for every three people still bothering to look for work.
1.3 million people will lose this assistance immediately, just after Christmas. By mid-2014 another 2 million will lose this aid as well.
“If my wife loses her benefit before she finds a job, we lose our house.” – Philadelphia resident.