Deficit Scare Talk Is a Big Scam by Corporations and Right-Wingers

[Joanne98]

We have to drive the debate about our economic priorities and not get distracted by the opposition.
August 5, 2010 |
The Great Recession doesn’t exist in Washington, DC. Six of the 10 wealthiest counties in the U.S. are in the DC metropolitan area, and according to Gallup’s Economic Confidence Index, citizens of the nation’s capitol are the most optimistic in the country, far more positive about the economy than the rest of America. It’s understandable -- the private sector simply isn’t hiring; public spending has averted a second Great Depression, and the spigot is located in the District.


The immense economic pain the majority of working Americans are suffering is seemingly unimportant to our political and media elites. It’s the best explanation for their callous and incomprehensible focus on a distinctly long-term deficit problem, while they shamefully abdicate the duty they owe their constituents to do whatever must be done to address a profound crisis in our labor market -- the worst jobs picture since the Great Depression.


At the same time, the stimulus funds that helped stave off a complete economic meltdown are drying up, and there’s little taste for an additional package in the halls of power in Washington. While Democrats and Republicans dither over the budget and argue over extending the Bush tax cuts, economist Paul Krugman wrote that “the real danger” we face is that “those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is ‘structural,’ a permanent part of the economic landscape — and that by condemning large numbers of Americans to long-term joblessness, they’ll turn that excuse into dismal reality.”


There is evidence that it’s already happening. Almost half of the unemployed have been out of work for at least six months. The average length of unemployment is now 26 weeks, a figure twice as high as the previous record set in 1983. Economists talk about “hysteresis in unemployment” -- a scenario in which those without jobs become unemployable. After a prolonged period of joblessness, they lose their skills and their confidence, and as a result, they lose their value when firms do eventually start hiring.

http://www.alternet.org/story/147748/deficit_scare_talk_is_a_big_scam_by_corporations_and_right-wingers%3B_the_problem_is_not_enough_good-paying_jobs/

[Vinnie From Indy]

1. "when firms do eventually start hiring."

Who says they will eventually start hiring Americans? Not only are our leaders in Congress failing miserably to understand and address the massive problem of unemployment, they are actively assisting in moving jobs out of the country. The model for exploiting the cheapest labor on a global scale is set and I do not think that many of the jobs we have lost will come back until Americans are broken and willing to work for pennies a day in unsafe conditions.

[madrchsod]

2. long term unemployed in their mid 40`s to late 50`s may never find....

another job that paid anywhere near what they were making. of course i am assuming that they will be able to find a job.

if they are over 60 they will never be hired full time.

[madrchsod]

3. the long term debt is military spending not social programs spending

military spending is debt that can never be paid until war is ended. spending on the common good returns at the minimum five dollars for every dollar invested.

[Enthusiast]

4. For being a big scam deficit scare talk

sure is getting a lot of traction. I guess that's what happens when you control the entire fucking media.

[unblock]

5. it's virtually impossible to have inflation - the government debt problem - without full employment

by far the biggest driver of prices is labor's bargaining power. inflation has been relatively low for quite some time now, not because greenspan was any genius, but because free trade and a lack of support for unions has steadily eroded labor's bargaining power. lacking an ability to negotiate higher wages, labor can't push employers' costs up nor can they increase their disposable income, and so there's very little upward price pressure.

what inflationary price pressure there is comes from commodity prices, which generally only increase when the world economy is growing strong, and pricing power from increasingly consolidated businesses, which is certainly occurring, but these are far smaller effects compared to the traditional labor effect.

with projections that "full" employment won't be seen for maybe FIVE YEARS, it's difficult to imagine just how a big deficit is a problem. in fact, if it WERE a problem that would be welcome news as that would indicate that the labor market had healed.



personally, i think it's so obvious, given that we know how to stamp out inflation but don't know how to avoid deflation, that the right solution is to give MASSIVE aid stimulate demand, i.e., mostly to the poor and unemployed and other people who will spend it locally. yes, run up more debt, but get the economy moving again, get people spending, get businesses selling and growing and HIRING, and THEN focus on reducing the (admittedly larger) national debt.


sitting back an allowing half a decade for the hope of getting to full employment is simply a disgusting policy.