Friday, March 4, 2011

Priorites - Create Jobs or Slash Spending?

Who Says Grow Jobs Before Cutting Spending? Everyone.

This week, yet another poll showed the public puts creating jobs ahead of deficit reduction for the "top priority of the federal government."

Are the masses simply pining for the candy of American politics? Should we instead follow the hard-headed advice from our elite economists and budget experts?

Fortunately, they are saying the same thing.

Leaving aside the hacks from ideological "advocacy tanks," credible experts from widely varying political backgrounds all say the same thing: create jobs first.

[ ]...Federal Reserve Chair Ben Bernanke:

"I think that if [deep spending cuts were] that's all that was done that the costs to the recovery would outweigh the benefits in terms of fiscal discipline."

Former President of the Peter G. Peterson Foundation David Walker, and President of the Economic Policy Institute Larry Mishel:

"Though a concern, most of the recent short-term rise in the deficit is understandable. Furthermore, public spending can help compensate for the fall in private spending, and help stem the pain of substantial job losses … job creation must be a short-term priority."

Economist James K. Galbraith:

"The hue and cry over deficits cannot sidetrack us from our true goals of full employment and sustainable energy ... People need work. We face the challenge of climate change. This challenge must be met while also improving the quality of life, or it can never be met at all. The broad outline of a program is therefore plain. There is no mystery about it. In 1929, Keynes wrote, 'there is work to do; there are men to do it. Why not bring them together?' Today as then, it is that simple."

The Simpson-Bowles deficit commission proposal:

"Don’t disrupt the fragile economic recovery. We need a comprehensive plan now to reduce the debt over the long term. But budget cuts should start gradually so they don’t interfere with the ongoing economic recovery. Growth is essential to restoring fiscal strength and balance."

Nobel laureate Paul Krugman:

"The clear and present danger to recovery, however, comes from politics — specifically, the demand from House Republicans that the government immediately slash spending on infant nutrition, disease control, clean water and more. Quite aside from their negative long-run consequences, these cuts would lead, directly and indirectly, to the elimination of hundreds of thousands of jobs — and this could short-circuit the virtuous circle of rising incomes and improving finances."

Current Chair of the White House Council of Economic Advisers Austan Goolsbee:

"The most important thing is to get growth ... We're finally moving to phase two of growth -- it's a recovery, it's fragile. That's not the moment that you want to be saying, 'OK, let's pull the rug out from under the recovery.' ... We've got to preserve the seed corn for investing."

Former Chair of the Obama admininstration's Council of Economic Advisers Christina Romer:

"...the question is not whether we need to reduce our deficit. Of course we do. The question is when. Now is not the time. Unemployment is still near 10 percent in the United States and in Europe. Tax cuts and spending increases stimulate demand and raise output and employment; tax increases and spending cuts have the opposite effect."

Former Chair of Reagan administration's Council of Economic Advisers Martin Feldstein:

"in the end, [the stimulus] just wasn't big enough, and I think we all recognize that now."

Former Chair of Clinton administration's Council of Economic Advisers Laura Tyson:

"We need targeted policies for jobs and right now, the deficit is not the issue."

Former John McCain presidential campaign economic adviser Mark Zandi:

"The recovery needs some more help. It would be prudent, I think, to provide some additional help..."

Economics is the dry science and supposed experts like the talking heads at Fox News can talk in circles all day, making the average viewer's eye role. The bottom line is relatively easy. The state and federal government can cut spending and jobs all day long. Sure those states and the fed will have less expenditures, but they will also have created millions more unemployed. Unemployed people do not add much to revenue since they are not making money. The unemployed do not buy products or services from businesses -small or large. Former Vice-President Dick Cheney once declared deficits don't matter - as that Republican administration ran up the biggest deficits in our nations history while also letting Wall St run wild and crash the economy. Now deficits matter, but not as much as keeping people employed and those people having the income and self-respect that comes from employment. Write your representatives today and tell them deficits are a long term problem to keep an eye on, but creating and keeping jobs is priority number one.