Economy  
comments_image Comments

Inaction by Congress Deepens the Jobs Crisis

The jobs crisis is getting worse. Why won't Congress do anything about it?

Continued from previous page

 
 
Share
 
 
 

One of the best ways to relieve global poverty is also one of the most intuitive—give money to the poor. Brazil has made an aggressive push to cope with widespread poverty by providing $31 billion in pensions and grants to the poor every year. As a result, the nation’s poverty rate has declined from 28 percent in 2000 to 17 percent in 2008, while child malnutrition was cut in half. These policies make good economic sense. When poor people have money to spend, they spend it and fuel growth that benefits the entire economy.

Social insecurity

And yet in the U.S., Obama is seriously considering cutting Social Security in order to reduce the federal budget deficit. As Margaret Smith emphasizes for In These Times, Obama has created a bipartisan “debt commission,” and packed it full of ideologues from both political parties who have been fighting for years to slash Social Security.

This doesn’t really make sense, because Social Security is funded by its own dedicated tax revenue, and is sitting on a multi-trillion-dollar surplus created by those taxes. It really can’t do much to reduce the deficit. With interest rates at record lows, lawmakers do not currently have any reason to be worried about the deficit. But if they wanted to take action on it, they’d have to deal with long-term issues like the rising cost of health care, the bloated defense budget and absurdly low tax rates on the rich. Cutting off income for senior citizens won’t help.

Blocking economic stimulus won’t help

And neither will efforts to block short-term economic stimulus. But Obama’s emphasis on the budget deficit plays into the hands of Congressional opportunists who want to block his economic recovery efforts. If we’re told over and over again that the real economic problem is the budget deficit, no money is going to be dedicated to problems like jobs—even if that money would actually help the government’s fiscal position by fueling economic growth.

The American economy is in the middle of an absolute employment crisis. Without strong federal action, it’s going to get worse.

Zach Carter is an economics editor at AlterNet. He writes a weekly blog on the economy for the Media Consortium and his work has appeared in the Nation, Mother Jones, the American Prospect and Salon.