WHY THE US GOVERNMENT "COULD & SHOULD" CREAT JOBS

How and why the conservative media pundits are helping to keep the US economy from improving.

...The US Capital

I am continually amazed that the conservative media pundits, and the conservatives in general, keep saying that we can´t raise taxes on wealthy Americans because they are the supposed "job creators". If that´s the case, why during the eight Bush years, with one of the largest tax cuts ever, were we eventually losing 750,000 US jobs a month when President Obama took over the presidency….?

These same individuals also continue to preach their sermons that we, "Don´t have a revenue problem, we have a spending problem."

But since we currently have the lowest amount of revenue coming into the government in over 50 years, the government is now only collecting taxes at 16% of our GDP while we are spending at a 25% level. There is no way under these conditions to balance the budget using only spending cuts without increasing the nations revenue intake.

And by the way, the bulk of the 25% of spending today is mainly due to two, un-paid-for Bush instigated foreign wars and an un-paid-for prescription drug bill. This bill, from our then not-so-bright Republican Congress, did not allow the government to negotiate drug prices with the pharmaceutical companies.

On top of all this, the far-right pundits falsely claim that there was a "mandate" in 2010 where the American voters said that they wanted the government smaller and out of our lives.

But with one of the lowest voter turn-outs in US mid-term election history, since when is the voting of only 18% of the nation´s registered voters a "mandate"? In a democratic republic, a true mandate is when over 40%-50% of the registered voters make that claim, not at 18%. And it has been determined that much of that low voter turn-out was because many Americans were upset that the then recently passed "Obamacare" health coverage did not go far enough and it did not offer a "Public Option", or a plan such as Medicare-for-All.

The far right media also says that "Government should not be in the business of providing jobs," which is another very wrong statement.

The truth is that creating jobs in a depressed economy is exactly what government could and should be doing. FDR proved that many times during the 1930´s Great Depression.

Unfortunately, the so called "stimulus package" was much too small and it had so many non-job, tax-cut items that the jobs items amounted to a total of only 1% of the nations GDP. That´s right, a measly 1%. And today, there are huge political obstacles to any of these types of job creation bills, mainly because the House is controlled by a party that benefits from the nation´s economic weakness.

As the Nobel economist, Paul Krugman, recently wrote, "Our failure to create jobs is a choice, not a necessity — a choice rationalized by an ever-shifting set of excuses."

Mr. Krugman went on to detail these "excuses", which I totally agree with and will basically summarize below:

EXCUSE #1

"Recovery is just around the corner!"

Policy makers keep falsely claiming that the economy is on the mend, and this has been an excuse for doing nothing as the "lack-of-jobs crisis" festers.

EXCUSE #2

"Fear of the bond market vigilantes."

Two years ago the Wall Street Journal declared that interest rates on United States debt would soon soar.

Ever since, warnings about the imminent attack of the "bond vigilantes" have been used to attack any government spending on job creation.

However, with a depressed economy, the interest rates (as expected) have stayed low. The interest rate on 10-year bonds was 3.7% when the Wall Street Journal issued that warning, but at the end of last week it was at 3.03%.

Regardless of these facts, the not-so-bright Republican House Budget Chairman, Paul Ryan, the man behind the GOP budget plan to dismantle Medicare, he declared last week that we must slash government spending to, "take pressure off the interest rates". What pressure is he talking about? Those rates are at near-record lows.

EXCUSE #3

"It´s all the American worker´s fault."

The claim here is that the millions of Americans who were working four years ago, aren´t working now because they lack the skills the economy needs.

If there really was that much of a mismatch between the workers we have and the workers we need, those workers that have the right skills, and were able to find jobs, they should be receiving wage increases, right? Unfortunately, they aren´t.

In fact, American worker´s overall average wages have actually fallen over the last ten years.

EXCUSE #4

"We tried to stimulate the economy, and it failed."

This is the biggest piece of nonsense.

The reality is that instead of an army of government projects that were started by the stimulus, there are now one half million fewer government employees than there were when President Obama took office.

So what happened to all that stimulus money?

Well, as I had previously said, much of it consisted of tax cuts, not spending or job creation.

Most of the rest of the stimulus consisted of aid to distressed families or aid to hard-pressed state and local governments. This aid only mitigated the slump, but it wasn´t the kind of FDR job-creation program we could and should have had. Many of us warned from the beginning, that the stimulus tax cuts would be totally ineffective and that the proposed spending was woefully inadequate. And unfortunately, those of us that had said that, were subsequently proven to be correct.

The final negative on the stimulus was where our government could have made the biggest difference.

That being, providing help for troubled homeowners. And unfortunately, almost nothing has been done in that area. The Obama administration´s program of mortgage relief has gone virtually nowhere. Of the $46 billion allotted to help families stay in their homes, less than $2 billion has actually been spent.

SUMMARY:

Based on the above, the economy will continue to not fix itself.

But as to the excuse as stated above, there are no real obstacles to having any government actions. The so called "bond vigilantes" did not materialize and are not expected to unless the idiot Tea Party members seriously allow the debt ceiling to not be raised. Any of the "structural unemployment skill issues" currently exist only in the imaginations of the nation´s media pundits. And if the government stimulus has appeared to have failed, the reality is that it was never earnestly tried in the first place.

As economist Krugman stated, "Listening to what supposedly serious people say about the economy, you´d think the problem was ´no, we can´t.´ But the reality is ´no, we won´t.´ And every [media] pundit who reinforces that destructive passivity is [and will continue to be] part of the problem."

I couldn´t have said it better.

Copyright G.Ater 2011

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