Unemployment could be down to 5% by now, if the government had spent enough to do it, according to one economist, Dean Baker, who is co-director of the left-leaning Center for Economic and Policy Research.
Here's why. In the latest monthly job report for July, the private sector added 172,000 jobs, but the federal, state, and local governments lost 9,000 jobs. And that's the way it's been going: over the past 3 years, governments have eliminated 693,000 jobs.
That is of course due to reduced tax revenues and slashed spending, especially at the state and local levels. Reduced federal grants and funding is also partly responsible for states' fiscal problems; and unlike the federal government, states have to balance their budgets.
Republicans seized the opportunity to shrink the government (their long-range goal), and they insisted on austerity to bring down the deficit. Too many Democrats went along, and President Obama compromised.
Everyone seemed to accept the idea that it was all too complicated to explain stimulus spending to the public.
An article by Bonnie Kavoussi on Huffington Post disagrees. President Franklin Roosevelt managed to explain the 1930s Depression and how to get out of it with stimulus spending and government job creation -- and he had nothing but his radio fireside chats. Now we have 24/7 television and the internet.
I agree. Obama and the Democrats have not done a good job of explaining how stimulus spending to create jobs is more important than reducing the deficit -- in such a time. We let the Republicans control the message. And now we're paying the price in continued high rates of unemployment and slow recovery.
Ralph
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Now we're in the trap. Conservatives made it impossible to do as much stimulus spending as was really needed -- and so of course it was less effective than it needed to be (although it was far far more effective than the Repubs will admit).
ReplyDeleteBut now they're saying: see, it didn't work. So, no more stimulus; no more government job creation. When they is exactly what is needed.
Why can't Obama explain this? As professorial as he really is, he seems unable to do the simple task that's needed. People could understand it. Just try.