Job Creation vs. Deficit Reduction
The nation needs jobs, millions of them. Congress needs to tackle this problem immediately. But instead of creating jobs, protecting families and addressing the true causes of the deficit, some members of Congress are making families pay for billions in tax giveaways for millionaires and corporate special interests.
We need leaders to work together to get our economy back on track and protect struggling families.
Proposed cuts to the Federal Budget would not only put holes in safety net programs at a time when they have never been more necessary but would also threaten our fragile economic recovery. Now is not the time to sacrifice jobs, schools hospitals and public safety. Instead Congress must spend money to create jobs.
The Economic Downturn
The deficit has ballooned largely because of the economic downturn. Tax revenues have shrunk because unemployed people who don’t have income, don’t pay income taxes. Sales tax revenue has also fallen as consumers have reduced their spending. But at the same time, government expenses have risen as more people are forced to rely on safety net programs. The bailouts and Stimulus Bill also boosted spending.
Shrinking the deficit through cuts in spending at a time when the economy is still fragile just weakens the recovery. The result is likely to be further reductions in revenue, increased safety net expenditures, and potentially larger deficits. We are seeing this unfortunate scenario play out in the U.K. and Germany, two nations that were held up as paragons of virtuous deficit cutting just months ago.
Luckily, the U.S. did not make that mistake. The federal government has not yet made large cuts in spending and our recovery, while tepid, continues even as it is challenged by rising oil and food prices, the Japanese economic situation, the ongoing crisis in the housing market, and other adverse factors. Strengthening the economy and creating jobs is the nation’s top priority. Deficit reduction must wait until the economy is back on a sound footing.
What the nation needs most are jobs, over 11 million of them, just to get the unemployment rate down to the pre-recession level. But even if jobs continue to grow at February’s pace (the fastest growth in eight months), it would take over 10 years to reach that point. Unemployed workers cannot wait 10 years. The nation cannot continue to rely on “the market” and corporate decision-makers.
Congress must enact a program of job creation that could include projects like these.
- Public investments in infrastructure such as roads, railroads, bridges, and schools, and in green jobs like weatherization of residences.
- A public jobs program to hire people directly.
- Additional money for state and local governments to preserve jobs and fund social programs.
- A tax credit for private businesses to encourage and reward hiring.
We need leaders with the moral courage to protect families, stand up to reckless politicians’ irresponsible cuts, and defend the American dream.
For more on the impact of deficit cutting in Germany and the U.K., see David Leonhardt “Why Cuts Don’t Bring Prosperity,” New York Times February 23, 2011