News & Politics  
comments_image Comments

Deficit Scare Talk Is a Big Scam by Corporations and Right-Wingers; The Problem Is Not Enough Good-Paying Jobs

We have to drive the debate about our economic priorities and not get distracted by the opposition.

The Great Recession doesn’t exist in Washington, DC. Six of the 10 wealthiest counties in the U.S. are in the DC metropolitan area, and according to Gallup’s Economic Confidence Index, citizens of the nation’s capitol are the most optimistic in the country, far more positive about the economy than the rest of America. It’s understandable -- the private sector simply isn’t hiring; public spending has averted a second Great Depression, and the spigot is located in the District.

The immense economic pain the majority of working Americans are suffering is seemingly unimportant to our political and media elites. It’s the best explanation for their callous and incomprehensible focus on a distinctly long-term deficit problem, while they shamefully abdicate the duty they owe their constituents to do whatever must be done to address a profound crisis in our labor market -- the worst jobs picture since the Great Depression.

At the same time, the stimulus funds that helped stave off a complete economic meltdown are drying up, and there’s little taste for an additional package in the halls of power in Washington. While Democrats and Republicans dither over the budget and argue over extending the Bush tax cuts, economist Paul Krugman wrote that “the real danger” we face is that “those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is ‘structural,’ a permanent part of the economic landscape — and that by condemning large numbers of Americans to long-term joblessness, they’ll turn that excuse into dismal reality.”

There is evidence that it’s already happening. Almost half of the unemployed have been out of work for at least six months. The average length of unemployment is now 26 weeks, a figure twice as high as the previous record set in 1983. Economists talk about “hysteresis in unemployment” -- a scenario in which those without jobs become unemployable. After a prolonged period of joblessness, they lose their skills and their confidence, and as a result, they lose their value when firms do eventually start hiring.

The Corporate Right’s Deficit Hysteria Takes Hold

As I explain in my forthcoming book, The Fifteen Biggest Lies About the Economy, today’s deficit hysteria is the fruit of a long campaign by the corporate right to make the national debt a central issue for both major parties -- what economist Robert Kuttner called a “disabling...bipartisan echo chamber on the alleged entitlement crisis.”

The basis of that campaign is politics. One thing practically everyone understands is that so-called “entitlements” Social Security, Medicare and other programs that provide a cushion of sorts for working families—are quite popular. That presents a challenge for conservatives: you just don’t get very far in U.S. politics on the promise of cutting grandma’s health benefits. While people respond positively to the idea of limited government in the abstract, when it comes to specifics, people love big government and most, if not all, of what it does.

People want a government that will educate their children, put out forest fires, pay for their million-dollar cancer treatments, make sure that big chemical companies aren’t poisoning their water, and save them from having to eat cat food after busting their asses for 50 years in the workforce. They expect cheap student loans and meat inspections and smooth highways, and even the lowest of “low-information” voters know they’re not going to get that stuff from the private sector.

So the Corporate Right has had to frame the debate on different terms. They’ve come up with a Big Lie to do it, claiming that the United States is headed toward a gazillion-dollar deficit just around the corner, and the only way to stave off this looming budgepocalypse is to swallow the bitter medicine of “entitlement reform.”

See more stories tagged with: