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?