The Contest Over the Real Economic Problem
“Our biggest problems over the next ten years are not deficits,” the president told House Republicans Wednesday, according to those who attended the meeting.
The president needs to deliver the same message to the public, loudly and clearly. The biggest problems we face are unemployment, stagnant wages, slow growth, and widening inequality—not deficits. The major goal must be to get jobs and wages back, not balance the budget.
Paul Ryan’s budget plan—essentially, the House Republican plan—is designed to lure the White House and Democrats, and the American public, into a debate over how to balance the federal budget in ten years, not over whether it’s worth doing.
“This is an invitation,” Ryan explained when he unveiled the plan Tuesday. “Show us how to balance the budget. If you don’t like the way we’re proposing to balance our budget, how do you propose to balance the budget?”
Until now the president has seemed all too willing to engage in that debate. His ongoing talk of a “grand bargain” to reduce the budget deficit has played directly into Republican hands.
As has his repeated use of the Republican analogy comparing the government’s finances to a household’s. “Just as families and businesses must tighten their belts to live within their means,” he said of his 2013 budget, “so must the federal government.”
Hopefully, he’s now shifting the debate.
The government’s finances are not at all like a household’s. In fact, it’s when American families can’t spend enough to keep the economy going, because too many of them are unemployed or underemployed and have run out of money, that government has to step in as spender of last resort—even if that means taking on more debt. If government doesn’t fill the spending gap, an economy can collapse into deeper recession or depression, pushing unemployment far higher. Look at what austerity economics has done to Europe.
Let the real contest begin.
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