In an essay at Huffington Post, “Progressives and the Deficit,” Robert Creamer warns, “It would be easy for Progressives to fumble the growing debate on the federal deficit.”
He writes, “Austerity for seniors, cuts in education spending, reductions in spending on infrastructure — these are not long term solutions to America’s fiscal woes. They will make matters worse.”
Creamer gives six rules for how Progressives should approach the issue of the deficit:
- Progressives should make it completely clear that we share the view that long-term deficits must be brought under control — the real question is how. There are a number of fiscal glide paths that reduce federal deficits over the long run.
- We must insist that each of the alternative paths to reduce the deficit be evaluated using one key measure: How will it affect our success at creating widely shared economic growth?
- In the short term — in order to dig our way out of the economic catastrophe that Bush and his friends on Wall Street left us — America needs more spending on jobs and economic growth. We need an expansionary economic policy now in order to jumpstart long-term growth for the future. …. The Great Depression did not really finally end until Emperor Hirohito’s bombing of Pearl Harbor gave American politicians the will to spend at levels that had previously been unheard in order win World War II.
- The current push by Wall Street fiscal hawks to cut the long-term deficit by reducing payments to retirees on Social Security, or cutting back on critical programs like education, don’t meet that test. … Cutting Social Security payments does nothing but diminish the wide distribution of income that is essential to sustain long-term growth. … In 1969, the U.S. per capita Gross Domestic Product (our nation’s output of goods and services per person) was $20,994. Adjusted for inflation it had more than doubled by 2009 to $41,646. … The problem is that the wealthiest people in America have kept a substantial portion of that income gain for themselves.
- We must always insist that whatever economic path is taken to assure long-term fiscal soundness in the future meets the test — will it stimulate widely shared long-term economic growth? To assure we meet this test, we must eliminate the confusion between investment and consumption in our federal budget. … It has to change if there is to be a political incentive to spend more federal dollars on investment in future economic growth.
- Stay on the offensive. … The Pete Peterson’s of the world have geared up to use the new Presidential Fiscal Commission as a soapbox to promote their pro-Wall Street views that attempt to paint “greedy seniors” and out of control “entitlements” as the villains of the fiscal drama. We can’t cede any ground on this issue.
Creamer writes, “The tiny plutocracy that sopped up most of our economic growth for the last decade and gambled recklessly on Wall Street are the true villains of the piece. They are the same people who insisted on the massive Bush tax cuts for the rich and a tax code where hedge fund managers who literally make hundreds of millions of dollars each year pay taxes at a lower rate than the janitors who sweep their floors.”
Written by Mike Bock
Some good thinking here. You can’t have a prosperous consumer economy without decent wages. People can not borrow their way, nor can can a housing price bubble caused by scarcity and irrationality fund a prosperous economy. We also face demographic changes and environmental restraints. The narrowing of wealth into the hands of the very rich, stagnation of wages for the majority and loss of manufacturing threatens the economy here, as does an ungoverned global financial system where the search for the highest yields by those with concentrated wealth has driven various economic frauds from S&Ls to Enron to the mortgage fiasco. We also face the fact that there has not been a sustainable peacetime economy for perhaps a century, with continued military spending being the Keynesian support that also drives huge deficits. Whatever benefits there may come from occupying Afghanistan and Iraq, threatening the trouble spots of Pakistan and Israel/Palestine, and keeping control of the oil regions, we can not afford them. It is something like a million dollars a day per soldier, and the costs continue long after the war stops or moves elsewhere. Our lack of concern for our fellows, particularly the elderly and children who are most vulnerable, eventually indicates lack of concern for ourselves. This also reflected in the scream and demean nature of the politics we have developed, where people who disagree are demonized. We need to reconsider many things that we have come to accept.
Even though I am a conservative, I share the belief that a recovery needs to include those on the lower rungs of the economic ladder. The biggest challenge is free trade. Free trade has a lot of positives and negatives. Many believe that the Smoot Halley Act, which was protectionist measure, worsened the Great Depression. How to enact some protectionist measures without creating trade wars or another economic downturn is certainly beyond my expertise. We should cease all trade discussions aimed at free trade with more countries.
Rick,
Free trade is good.
http://en.wikipedia.org/wiki/Comparative_advantage
We all become richer when we have access to better products at lower costs.
Some aspects of free trade are good, some are not, and some are good for some people and not others. America’s lifestyle certainly takes a hit when jobs are moved to cheap labor areas. Capital does well, although they eventually may be unable to hide from the problems their conduct is creating. The search for the lowest wages, the lowest environmental protections, the lowest marketplace protections and the like are likely to be a lose lose situation, creating a race to the bottom. It is clear that whatever a “sustainable economy” might mean in theory, no such thing is likely to exist in practice any time soon.