"The Manufactured Deficit Crisis"
Harold Meyerson wants Washington to quit the deficit hawkery and focus on creating jobs:
Of all the gaps between elite and mass opinion in America today, perhaps the greatest is this: The elites don’t really believe we’re still in recession. Or maybe, they just don’t care.
How else to explain the continual harping on the deficit by editorialists, centrist think tanks and the like when the nation is still enmeshed in the most serious economic downturn since the 1930s? How else to understand the growing opposition to the jobs bills Congress is set to vote on this week, particularly when nobody has identified any future engine of American economic growth save countercyclical public investment?
This reminds me of a point Dean Baker made a while back about the fact that the country is “facing a serious crisis in the form of a manufactured crisis over the budget deficit.” After a curious absence during the George W. Bush’s presidency, deficit hawks have come out of the woodwork during Barack Obama’s to clamor about spending, push legislators to abandon further stimulus, and spout nonsense about how the president’s political troubles flow from public anger over high spending.
The truth is that the public cares far more about reducing unemployment than it does about reducing the deficit. As Meyerson points out in his column, 81 percent of those surveyed by the Pew Research Center want Congress to act on the “jobs situation.” Insofar that the deficit has any political salience, it is because Americans are uneasy about unemployment and the economy, which translates into an uneasiness over deficits. If you want to calm Americans’ fears about the deficit, the best option is to reduce unemployment. Moreover, the stimulus worked to bring the economy out of the recession. What’s left now is unemployment and given that it is higher than it was last year, you can easily make the case that further stimulus spending is necessary. But as long as this manufactured crisis persists, Congress won’t act, and we’ll lose the chance to provide jobs to millions of Americans.