This economy is in trouble. The jobs picture is getting worse, not better. Europe is headed into recession. China, India and Brazil are slowing. And here, even with record corporate profits, soaring CEO salaries and big banks back to making big bets, most Americans haven’t shared in the “recovery.”
Jobs are scarce, wages are declining, health benefits are being reduced and basic services — from teaching to policing to food safety inspection — are being cut. This thing isn’t working for working people.
Mitt Romney and Republicans say they have the answer: cut taxes and cut spending. But, as economist Paul Krugman has shown, we’re already essentially doing that. Republicans forced President Obama to sustain the top end Bush tax cuts to gain support for the payroll tax cut and extended unemployment benefits that have been vital in keeping the economy from tanking. And government spending — local, state and national — is going down, not up. Governments are shedding workers, not adding them. You can’t cut your way to growth.
There are common-sense things that should be done. Interest rates are now cheaper than free. (Interest on U.S. Treasury 10-year bonds hit a record low 1.45 percent last week, far less than inflation.)
That means the U.S. can now borrow money for no cost to rebuild its aged infrastructure. It will never be cheaper to do so. And with the construction industry flat on its back in wake of the housing collapse, there are skilled workers willing and ready to work. Roads, bridges, airports, sewers, mass transit and retrofitting public buildings for energy efficiency — all these will produce economic benefits with greater gain than the borrowed money will cost. As the conservative Financial Times editorialists concluded, “whatever is invested at these rates is likely to pay for itself in higher growth and revenues.”
That is but a first step. One easy way to generate jobs is revenue sharing with the states, first championed by President Richard Nixon. Providing the states with money to rehire laid-off teachers and cops would make sense for our children and our economy.
In addition, the federal government should pay for direct jobs programs in targeted areas. Obama has called for a jobs corps for veterans.
Congress should sensibly expand that to create an urban corps and a green corps that would hire young people under 25 and put them to work. There is no greater threat to this country than the mass unemployment of young people at the start of their working lives. To pay for these programs, we could sensibly end the top end Bush tax cuts for earners making more than $250,000 a year, and pass a bank speculation tax to limit computer-driven bank speculation that is about gambling, not investment.
The Financial Times is not a liberal paper. Yet, its advice falls on deaf ears among the right-wing Republicans. Conservative governors like Wisconsin’s Scott Walker and New Jersey’s Chris Christie are scuttling infrastructure projects, not championing them. House Republicans blocked virtually all of the jobs agenda that President Obama called for last fall. Their budget would require even deeper cuts in education, child nutrition, aid to the states, Medicaid and more. They obstruct action on the economy, and then blame Obama for not doing anything. They seem intent on blocking anything that might improve the economy before the November election.
In a time of national crisis, cynical partisanship is getting in the way of action.
