The deficit problem is largely solved. Yet Republicans are still trying to cut us back into recession. Before the election they had an excuse: if they kept the economy down people might vote against Obama. But now? What is their game? Jobs fix deficits, and to fix jobs, fix trade and invest.
Proof In Pudding
We now have (even more) clear evidence of what we already knew for sure: cutting government cuts the economy. Along with every other country that has tried cutting their way to growth (now and in all of history, ever, anywhere), our economy was forced into decline last quarter and that decline was entirely caused by cuts in government.
Bob Borosage yesterday, quoted in the Huffington Post’s Jobs Deficit: Austerity Politics Threaten Obama’s Economy,
As Europe has shown and the IMF has warned, inflicting austerity on a weak economy is ruinous and is likely to drive us back into a recession. Those dismissing the downturn as due to an odd drop in government spending should consider that more of these are on the docket.
And Borosage again in Warning: Austerity Hysteria Endangers Your Job,
The U.S. economy shrank unexpectedly in the last three months of 2012, ending over 30 months of economic growth. Exports lagged, reflecting, in part, declining markets in Europe, now suffering a costly recession inflicted by misguided austerity policies. But the greatest cause of the decline was unexpectedly large cuts in government spending, particularly in the military.
Yes, Virginia, cutting government spending in a weak economy costs jobs.
A three-month downturn is a caution, not a catastrophe. But Washington seems too wrapped in its deficit delusions to pay attention to the flashing yellow lights.
Krugman today, in Looking for Mister Goodpain, points out that everywhere else this has been tried the result is higher unemployment and slower growth. After describing the search of an austerity success story Krugman concludes that we should start fixing unemployment,
So what do we learn from the rather pathetic search for austerity success stories? We learn that the doctrine that has dominated elite economic discourse for the past three years is wrong on all fronts. Not only have we been ruled by fear of nonexistent threats, we’ve been promised rewards that haven’t arrived and never will. It’s time to put the deficit obsession aside and get back to dealing with the real problem — namely, unacceptably high unemployment.
Jobs Fix Deficits
The cutters have had their chance. We all understand that the deficit scare is not about deficits at all, it is really about cutting what they want to cut: the things We, the People do to make our lives better, because they want that money for the 1% who pay for their campaigns.
If you really want to worry about deficits the way to fix deficits is jobs. Invest in our economy and the things that make our lives better, and the growth will come. Because democracy is the best economic policy.
Invest in a modern, 21st-century infrastructure and the economy will grow, and deficits as a percent of that economy will become very small — just like what happened when we did that before. (Unless you think the interstate highway system and airports, etc. didn’t help the economy.)
Look to history, people, not to corporate/billionaire propaganda. Look at what has worked, and do that. Investing grows economies, cutting kills economies.
A Deficit To Worry About: Our Trade Deficit
We do have a deficit to worry about, and that is the trade deficit. More than $1 billion dollars a day is drained out of our economy by the trade deficit.
The same crowd (billionaires and their giant, anti-competitive corporations) that promotes the budget deficit scare is benefitting from the trade deficit.
Since Reagan (coincidence?) we have been buying more than we sell and moving jobs and factories out of the country. This pits American workers against low-paid, exploited workers in countries that do not protect people or the environment. And it gets worse every year.
The result of Republican policies has been millions of people begging for work at any wage, and the middle class forced into ever-increasing debt. Meanwhile all the income and wealth accumulates at the very top. … It almost looks like that is the real Republican plan.
Me, October: Trade Deficit – One Root Of Many Problems.
Borosage, today: Why a Trade Strategy Should Be a State of the Union Priority
This post originally appeared at Campaign for America’s Future (CAF) at their Blog for OurFuture. I am a Fellow with CAF.
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