"Austerity is Dead"
It’s Time to Focus on Jobs & Growth
For the better part of three years Washington has been gripped by an obsession with the deficit, but a new paper out from the Center for American Progress today argues that it’s time to abandon austerity, ditch deficit hysteria, and instead focus on jobs and economic growth.
What’s changed since Washington caught deficit fever in 2010? A lot, as it turns out.
- The deficit has been significantly reduced and stabilized.
- We have already enacted significant deficit reduction: $2.5 TRILLION worth, three-quarters of which has come from spending cuts.
- Health care spending has grown much more slowly than expected, due in part to Obamacare.
- The intellectual argument in favor of austerity collapsed in a somewhat spectacular fashion.
- The implementation of austerity in Europe has been nothing short of disastrous. Unemployment in the Eurozone is at a record high and the UK’s austerity almost resulted in triple-dip recession and has actually resulted in more, not less debt.
What hasn’t changed? We continue to have tepid growth and the economy is not creating nearly as many jobs as it could or should be.
- $50 BILLION to fix our crumbling infrastructure.
- $20 BILLION for early childhood education.
- $12 BILLION for the “Pathways Back to Work Fund,” which would help provide opportunities for the long-term unemployed, young people, and low-income people.
In addition to all of these key facts, it’s also time to recognize some political realities. Since Republicans refuse to negotiate in good faith toward a so-called “grand bargain” there is no point in continuing to pursue one. Instead, we ought reset the debate, replace the sequester for three years with an achievable package of cuts and revenue increases, and turn our attention toward making the investments we need to fuel jobs and growth.
You can read the entire report in all of its wonky goodness HERE.
BOTTOM LINE: Austerity is dead — or at least it should be.