Deficits and jobs

For the Repubs, it's simple and clear: To create jobs, you Cut Spending. Cut Taxes. Cut Regulations that cost businesses. Do all that and the Money Will Flow. People will have jobs and the government will get revenue. And Prosperity for Wealthy People Will Trickle Down to the Little People.

The trouble with this argument is that corporations' failure to create jobs is not due to lack of money to hire. They are sitting on huge sums of money that could be invested in new jobs, but they're not. Their argument is that people aren't buying, so there is no great demand for more goods and more jobs to produce them.

The Republicans want to keep it this way to keep pressure on, to make full use of the deficit and looming default in order to justify shrinking the size of government and force the cutting of social network programs due to lack of funds -- the real and forever goal.

The other trouble with this argument is that it just doesn't work out that way, Ronald Reagen's claims notwithstanding. They memorized this false Reagen mantra that says: cut taxes and the economy will improve and jobs will be created.

The truth, as I see it, is that people aren't buying because they don't have jobs or money to spend. So where do you intervene in this equation? The Repubs want to reward those "who create jobs," while the Dems want to have the government create jobs with stimulus money (or with public works jobs, if they dared and could get it passed).

Robert Reich, Clinton's Sec. of Labor was on This Week last Sunday. He argued for immediate creating of public works jobs like WPA and CCC to give people real jobs. Private industry isn't creating jobs, so the government has to do it temporarily. This then puts people to work doing real things that benefit the country (instead of just paying out unemployment benefits), and it puts money in the pockets of workers, who will spend it and create demand, which increases production and creates more jobs.

Larry Summers was also on tv that morning. His advice was: more economic stimulus and cut payroll taxes for workers and middle class in the short term and worry about the deficit later. This is Larry Summers? Friend of Wall Street? Part of Obama's mistake in choosing his economic team, in my opinion. Where was he when the first stimulus was way too small?

I'm convinced of this plan and have been since the crisis first hit.
But does what makes sense matter any more in this political climate? There sat Senator Shelby on the same program with Reich. Shelby is on the Senate Finance Committee, and he just flatly declared that stimuluses don't work, and we must cut spending and do tax reform instead. There seems to be no convincing them.

So what's to be done? You can't get anything much done in the Senate if a determined minority is willing to use the filibuster. And you can't convince the Republicans that their Reagen mantra is wrong. So we wound up with a much-too-small stimulus in 2008 -- which wasn't enough to do the job; and then Repubs point and say: look, it didn't work and we wasted all that money. When what was needed instead was a larger stimulus and a public works programs to give people jobs.

Here's the real question. What happened to the move to change the filibuster rules so that it gave the minority party the power to delay legislation temporarily, but removed the power to permanently prevent a vote? At the beginning of this year, it seemed like the Dems had the votes but they backed away -- and it was going to be taken up again later. What happened? I've heard no more about it.

Ralph