Abandoned: An Economic Recovery on Life Support
Not one word uttered by Mr. Obama or the top lawmakers from either party about the faltering recovery, the persistence of long term unemployment, or the blood-letting in state and local governments. Instead, these modern day Neros fiddle about, continuing to peddle the tired and empty rhetoric of fiscal austerity and deficit reduction as the paramount concerns of the day. They are fools, all of them, unprincipled and ideological fools, ignoring what should be at the top of the economic policy agenda—short run stimulus measures that will precipitate the kind of economic recovery that is capable of reducing the rate and duration of unemployment from their current, unacceptably high levels. Then, and only then, will it make sense to focus on long term deficit and debt reduction. Arguments that deep spending cuts and deficit reduction will stimulate economic expansion and reduce unemployment are complete and utter nonsense, based on faulty analyses and a misreading of history.
My previous post outlined some promising short-term stimulus measures that might be undertaken to kick-start the recovery. For long-term deficit reduction, I also pointed out that there are already two good bipartisan templates in the Simpson-Bowles and Domenici-Rivlin plans, and hence there is no reason, other than ideological posturing, for all this ridiculous hoopla over coming up with a set of recommendations for potential tax and spending changes.
After Friday’s abysmal jobs report, I can only hope that at least one of our political leaders will have the guts to step up, call a stop to the inane fiscal austerity talk, call for an immediate increase in the debt ceiling, and demand the passage of some effective short term stimulus measures. Otherwise, Rome will continue to burn.