The Bureau of Labor Statistics today reported that the economy created a disappointing 69,000 jobs last month, and that the unemployment rate increased to 8.2 percent. The job creation totals for March and April were both revised downward.
At the same time, borrowing rates for the U.S. government have hit lows never before seen:
Investors stampeded into U.S. government bonds Thursday, driving the interest rate on the 10-year Treasury note as low as 1.54 percent, a record…The record low rate beat the previous mark of 1.55 percent, which was set in November 1945. That was just after the end of World War II, when government price controls kept interest rates artificially low to preserve financial stability.
As Nobel Prize-winning economist Paul Krugman explained today, “When the private sector is frantically trying to pay down debt, the public sector should do the opposite, spending when the private sector can’t or won’t. By all means, let’s balance our budget once the economy has recovered — but not now. The boom, not the slump, is the right time for austerity.”
Instead, Congress, driven by a cut-happy Republican House, has pursued austerity, leading to hundreds of thousands of public sector job losses. Last month alone, 7,000 state and local level education jobs disappeared.
It makes no sense to sustain these sort of economic body blows when the government can borrow on the cheap and use it to put people back to work. Speaker of the House John Boehner (R-OH), though, responded to the jobs report by criticizing the supposed “‘stimulus’ spending binge” (the existence of which is a myth), and Republicans have made no indication that serious job creation efforts are on their agenda.
Boehner, of course, neglected to mention that the spending cuts the GOP demanded in return for raising the debt ceiling will stifle job creation, and that the GOP refused to pass the Obama administration’s American Jobs Act, which economists said would create millions of jobs. In fact, Boehner has already indicated that he and the GOp will demand more spending cuts as the nation approaches its borrowing limit again later this year.