Robert Reich says that President Obama three year budget freeze proposal is a move exactly opposite of what is needed. Reich asks, “Is the president panicking?”
Reich says, “Obama’s three-year freeze on a large portion of discretionary spending will make it impossible for him to do much of anything for the middle class that’s important. Chalk up another win for Wall Street, another loss for Main.”
Instead of a budget freeze, Reich recommends:
- “Enact a second stimulus. It should mainly focus on bailing out state and local governments that are now cutting services and raising taxes, and squeezing the middle class. This would be the best way to reinvigorate the economy quickly.
- Help distressed homeowners by allowing them to include their mortgage debt in personal bankruptcy — which will give them far more bargaining leverage with mortgage lenders.”
Reich says, “A spending freeze will make it even harder to get jobs back because government is the last spender around. Consumers have pulled back, investors won’t do much until they know consumers are out there, and exports are minuscule.”
