Republicans have long argued that the deep federal budget cuts they have dreamed of would somehow jumpstart the ailing U.S. economy and spur new job creation. GOP lawmakers, in fact, insisted on enacting the largest single-year budget cut in history as a precondition to avoiding a government shutdown earlier this year. If the Republican theory was correct, that huge cut, and conservative promises of more of the same, would right now be encouraging huge job growth. That isn't happening.
The Labor Department reported Friday that employers added just 54, 000 jobs in May, and the nation's unemployment rate actually shot up to 9.1 percent. The economy is so close to stalling out that economists have begun to worry once more about a double-dip recession. How much more bad news will it take to convince folks that the twin conservative economic theories of federal budget cuts and tax cuts for the rich just don't work?
Chad Stone, chief economist at the Center for Budget and Policy Priorities, a Washington think tank, says:
Today’s employment report should be a wake-up call to policymakers who continue to say the budget deficit is a more immediate threat to the economy than the jobs deficit. Nearly two years after the economy technically turned the corner from recession to recovery, job growth was disappointing in May and unemployment remained high. At the same time, interest rates are very low, indicating that financial markets are far more concerned in the near term about a sluggish recovery than about deficits, debt, or inflation.
Republicans, allegedly, are supposed to be about looking out for business interests. But, as Stone says, business clearly is more interested in getting the economy moving than it is in tackling the deficit. In fact, conservatives will only make a bad economy worse, Stone says, by agreeing to increase the federal debt limit only after further budget cuts.
"Lawmakers must raise the debt ceiling so that the United States does not default on its obligations arising from tax and spending legislation that was previously enacted," Stone says. "If implemented now, those budget cuts would drain purchasing power from the economy at a time when the recovery is already losing momentum and forecasters expect another quarter of sluggish growth." So why aren't politicians of either party truly listening?
Article comments
1 - Leroy
Good article, Scott.
It's all true: the path to prosperity goes through higher employment, not debt reduction. You'd think that we would have learned that lesson by now, In 1937 FDR relented to republican demands and tried to cut spending only to send the economy back down. It's always that way with recessions.
We are suffering a Demand Drought, consumers aren't buying enough stuff for the simple reason that there are fewer of them with any money and the others have less disposable income.
Damn the deficit torpedos, full speed ahead with employment!
2 - Baronius
So, if you and John Lake are correct, the economy is simultaneously booming because of President Obama and teetering because of the Republican House. Either way, I should vote Democratic, I guess.
What bugs me the most about this article is the extensive quote from Reich. Not one word of it was economic analysis. Read it over. It was all about politics. It bugs me that you're using his credentials as an economist to promote a political angle.
3 - Cannonshop
#2 Point of order? the section's "Politics", and if you've ever read (and I know you have) papers by economists, they tend to be dense, dry, and easily interpreted to mean or support whatever the reader's (or promoter's) own views dictate. Reich is an economist by credential, but a mouthpiece for the party (in his case, Democrat) platform by trade.
#1 Leroy, this might interest you if you're open minded enough to look at a different take on Roosevelt's policies. There are some interesting links there.
(assuming I got the formatting right, it should link to Walter Williams' homepage.)
4 - Cannonshop
crap. did something wrong.
it's this, drat it.
5 - Leroy
Cannon: I looked at your citation and was disappointed.
This is what it promised :
"Great Myths of the Depression:
“HERBERT HOOVER believed government should play no role in the economy.”
“GOVERNMENT PROGRAMS helped lower unemployment by putting many Americans to work.”
“FRANKLIN ROOSEVELT’S ‘New Deal’ saved America from the failure of free-market capitalism.”
Those are just typical strawmen.
Then the article itself skips around from one anecdote to another. Arguments are only supported with other arguments.
Nothing new.
Nothing but an editorial. Overall, it's a pretty low quality citation. A waste of time.
6 - Cannonshop
#5 Leroy, like all politics, people will tend to take from a source what they wish. I didn't actually expect you to do MUCH reading of the material before dismissing it, but as a hard-core pessimist, I can't claim disappointment.
The straw-men you mention, however, were in the U.S. history textbooks we had in high school in the 1980's, and my niece (now graduation-bound from HS) today, so they're not the right-wing constructs you're looking for-they come from YOUR side of the aisle, thus making them somewhat amusing, since you obviously do not believe in them yourself, a visit to your local school board might be in order if for no other reason than to assure that your kids (or the kids in your area) aren't being indoctrinated with such "right-wing fallacies".
7 - Leroy
They're STRAW-MAN arguments, Cannon! Nobody's going to defend them. Since they're made of straw they're easy to beat up, but they're YOUR arguments, not the lefts. Your rightist guy only SAYS they're left arguments because they're so easy to beat up.
Get it?
8 - Cannonshop
#7 Leroy, the Right certainly isn't writing the text-books, which is where those arguments are most commonly found-in public school text-books, in public schools, which are predominantly run and staffed by members of the LEFT.
It's your baby, dude.
9 - Leroy
Cannon, not pleased with the paltry advances of his strawman army calls up strawman reinforcements! The damn field looks like a fire hazard.
10 - Cannonshop
It's not a straw man, Leroy, You yourself repeated the basic myth in post...number 1 of this thread-the myth that the "New Deal" did anything other than prolong the Depression. I referenced you a source, you didn't like that so you called it a straw-man...but maybe you do so because really, you can't argue it on merits.