Vision: 5 Economic Ills That Demand We Go Beyond What We Think Is Possible

My friend, the late Mike Harrington, used to describe his politics as "on the left wing of the possible." It's a fine aspiration. But if anything, economic problems have become more politically intractable since Mike died in 1989.

Scanning the various economic ills afflicting our Republic and its citizens, it's evident that nearly all of the solutions lie beyond what is currently deemed thinkable in mainstream politics -- beyond the left edge of the possible.

It's not that my own views and values have become more radical in two decades. What has changed is that the American political center has shifted further to the right, while the twin assault on the good society by the private financial system and the organized right has become more intense.

There are only two possibilities: either we act to expand the boundaries of the possible, or we suffer the consequences.

Consider these five prime economic challenges:

Economic Recovery and the Budget. We are told by Beltway solons of both parties that the prime malady harming the economy is the budget deficit. But nobody can explain how fiscal austerity will promote economic recovery. On the contrary, the more we cut, the more we retard economic recovery and the more we remove the cushions that make the recession slightly more bearable for regular people.

Out here in the real world, the problem isn't the deficit; it's the recession, the high rate of joblessness and the stagnant earnings.

The solution? Significantly more public investment to get the economy on a faster road to recovery and to generate more and better jobs. In the short run, the deficit increases. But over time the economy grows faster and the debt burden recedes.

Unfortunately, both parties are mainly jousting over budget cutting. We have the party of cuts versus the party of deeper cuts. Neither is putting forth a serious recovery plan. The win-win solution that benefits Main Street is beyond the left edge of the possible.

The Health System. Once recovery comes and tax receipts return to something like normal (assuming that the right doesn't further gut the tax code), America doesn't have a deficit problem; we have a health system problem.

President Obama's Affordable Care Act insures more people, but does so through the private insurance system, and doesn't reduce overall health care costs. The Republicans would cut costs by cutting care.

Every other wealthy nation insures everyone for about 10 percent of GDP. Our system leaves out some 50 million people, and costs 17 percent of GDP. That's a difference of seven percent of GDP, far more than the structural budget deficit.

The solution? National health insurance, of course; or if you'd like to sound more like motherhood and apple pie, Medicare for All. Polls show that large majorities of Americans support it. But in mainstream politics, national health insurance is considered beyond the left edge of the possible (makes you wonder who controls mainstream politics.)

The Banking/Housing Mess. Seven million Americans are on a path to foreclosure, one home in three has more mortgage debt than the value of the home, and housing values declined last year in 18 of the top 20 metro areas. Home ownership as a ticket of lifetime asset accumulation is being denied to the next generation.

The Administration's relief program, the Home Affordable Modification Program or HAMP, is voluntary to the banks. It is helping less than one out of ten homeowners in trouble. Stronger medicine to keep people in their homes is rejected because it would force banks to recognize losses. So foreclosures continue and housing prices continue to sag.

The solution: give bankruptcy judges the power to order reductions in mortgage principal owed. Use leverage on banks rescued by government to insist on deep refinancings, so that distressed homeowners are not forced onto the street. In the long run, banks would incur less loss, neighborhoods would be less blighted.