Here’s what happens when you put a premium on austerity in the middle of a jobs crisis.
The federal government plans to shut 40 percent of its computer centers over the next four years to reduce its hefty technology budget and modernize the way it uses computers to manage data and provide services to citizens.
Computer centers typically do not employ many people to tend the machines, but analysts estimate that tens of thousands of jobs will most likely be eliminated.
The federal government is the largest buyer of information technology in the world, spending about $80 billion a year. The Obama administration, in plans detailed Wednesday, is taking aim at some of that by closing 800 of its sprawling collection of 2,000 data centers. The savings, analysts say, will translate into billions of dollars a year and acres of freed-up real estate.
Do I think government should be deliberately inefficient? No. Do I think this is a good time to throw tens of thousands of people working in data centers into the street? No. It’s not good for the economy, it’s not even good for the US budget, considering that these people will have to pick up safety net services.
And this is the point. There’s no coherence to a program of austerity when 14 million people are out of work. Stimulus may have a tarnished public reputation because of the inability of the Recovery Act to lower the unemployment rate. But the response to that is public education on the need for stimulus, not fear of doing the right thing for the economy in case it doesn’t totally work.
In the debt ceiling talks, Mr. Obama has not made new stimulus his top priority. He has instead pushed for a grand bargain that would sharply reduce the deficit. His calculation seems to be that any stimulus he could win from Republicans would have only a minor effect on job growth — and come with a political cost.
By now, many Americans are at best skeptical of stimulus. If Mr. Obama argued for more temporary tax cuts and spending, he might be able to increase popular support for such measures and make them a bigger part of a debt ceiling deal. (For the deficit to fall, the steps would obviously have to be offset by larger spending cuts or tax increases.) Yet by pushing for new stimulus, he would also tie himself ever closer to the troubled economy and the unpopular policies to help it.
Here we have a President afraid of his own economy, afraid of actually telling the people about basic economic theory. It wasn’t always like this. In 1936 we had a President who said this:
Now, the rise and fall of national income—since they tell the story of how much you and I and everybody else are making-are an index of the rise and fall of national prosperity. They are also an index of the prosperity of your Government. The money to run the Government comes from taxes; and the tax revenue in turn depends for its size on the size of the national income. When the incomes and the values and transactions of the country are on the down-grade, then tax receipts go on the down-grade too. If the national income continues to decline, then the Government cannot run without going into the red. The only way to keep the Government out of the red is to keep the people out of the red. And so we had to balance the budget of the American people be-fore we could balance the budget of the national Government.
That makes common sense, doesn’t it? [...]
To balance our budget in 1933 or 1934 or 1935 would have been a crime against the American people. To do so we should either have had to make a capital levy that would have been confiscatory, or we should have had to set our face against human suffering with callous indifference. When Americans suffered, we refused to pass by on the other side. Humanity came first.
Instead, we now have a President who sees millions upon millions of foreclosures for several years and decides to do nothing, even with billions of already-appropriated money in TARP and executive authority through Fannie and Freddie. Instead of investing in education, this President is begging CEOs to fund it, ceding control of education dollars to elites. Instead of explaining that “the only way to keep the Government out of the red is to keep the people out of the red,” this President explains that the most virtuous thing we can do right now is cut the safety net and trillions more from budgets, and then we can maybe get around to jobs.
A sixth-grade student in Lodi, California, saw that his classroom had not enough pencils and paper. He wrote the President and got a response. The President wrote back “In America, each of us can write our own destiny. So long as you are willing to dream big and work hard, you can accomplish great things and help others to do the same.” The student was pleased to get the letter, but I imagine he also thought, “No, you don’t understand, we need pencils and paper.”
Winning the future, losing the present.




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Exceptionally resonate post, David.
Your very last sentence is another, seriously splendid, bumper-sticker for the ages.
Thank you, again, for your prolific, and most useful, from my selfish perspective, “output”.
DW
http://pages.citebite.com/g8t8t9f9ajrv
and multiple afterthoughts and information provided there but thereafter
So, as Gomer Pyle would say
Surprise, surprise, surprise!
https://sites.google.com/site/evernewecon
http://www.youtube.com/watch?v=J6_1Pw1xm9U
Someone might have checked that link and those
multiple comments.
Oh, but there’s just one more thing.
http://www.businessinsider.com/nobel-economist-says-we-have-to-prosecute-fraud-or-else-the-economy-wont-recover-2010-11
If a Nobel Laureate can say it, works for me.
https://sites.google.com/site/evernewecon
purportedly and believably a somewhat limited range
but gorgeous music otherwise
Give me a squeeze Grace Slick
http://www.youtube.com/watch?v=WANNqr-vcx0
Just a Gen X idiot?
Dear Gen Z:
Your g-grt/parents’ retirement nest eggs largely include
tax-locked annuities of the very same nature intended for
you once your economy is converted arrogantly and feebishly]
in to a “casino” economy serving no one’s good purpose really,
certainly not really as to efficient assignment of resources.
It’s just arrogant creeps and their bribed representatives
carving out angles for themselves.
Those retirement nest eggs are today enlisted in the bold support
of the stupid would-be Alice in Wonderland Tier 1 ratio-satisfying
false collateral valuations of property that is being robo-fraud
foreclosed on in support of a Government-could-care-less
Ponzi-scheme-with-your-retirement. In a way, the diamond diggers
in Sierra Leone have it better, though it’s also a casino economy.
They don’t get forced into this arrogant persons’-fantasy-at-your-
expense.
https://sites.google.com/site/evernewecon
Ah, Mr. President, I can’t write my own destiny if I don’t have a pencil.
Exactly.
He’ll be doing something when he realizes his reelection is seriously at risk, but it will probably be too little too late. Of course, if Bachmann is nominated, forget it. He’ll coast.
yes. hope they’re saving some of this stuff.
But let’s remember the first act of Congress signed by the new president in 1933: wage cuts for government workers and soldiers to reduce the budget deficit better than Hoover, a campaign promise FDR made in 1932 and kept as his first priority.
But FDR had a Congress that was bipartisan in support of Hoover’s agenda and was anxious for FDR to tell them to pass it so FDR could sign Hoover’s economic program into law.
FDR’s two original actions were the unconstitutional devaluing of the dollar, and putting an end to government relief programs for people able to work, thus the CCC program that took the young men of families with no one working on relief and sent them off in public service and job training, and in exchange sending $25 a month to the family. The young man got $5 in spending money, plus room and board and medical care and if he was willing education or trade skills.
FDR totally opposed paying the Bonus early, just like Hoover, vetoing Congress and forcing them to override his veto. At his wife’s suggestion, the unemployed vets got to join the CCC even tho they were too old.
But let’s get to the real problem with your posts. You keep blaming Obama for the consequences of the Republicans in Congress and especially those in the House, who have considered the first enumerated power of Congress unconstitutional for two decades. And now that they have a majority in the House and Obama is President, they have declared the second enumerated power of Congress unconstitutional as well.
Why won’t you blame the Republicans for blocking all efforts to create jobs in any meaningful way for a decade, Republicans who reject the fundamental reason for the writing of the Constitution in the first place back in 1787?
Why do you ignore the GOP who seek “to take the country back” to 1787?
The Republicans clearly see the state of the colonies in 1787 to be the ideal, back when it was impossible for Congress to impose any taxes because one State objecting blocked everything, when every significant action required two-thirds of the States to approve.
The Republicans are the problem, not Obama.
The Republicans are the problem, not the Democrats in Congress.
The Republicans in Congress are the problem because they will not allow the first and second enumerated powers of Congress to be exercised as long as they are in the majority in the House.
Nothing Obama can do will change the House Republicans to accept their first enumerated power of Congress as a fundamental responsibility of a member of Congress.
The voters elected a majority to the House who reject the Constitution at its core, knowing the Republicans have rejected the Constitution at its core. Anyone who signs Norquist’s pledge has done so because they refuse to accept the first enumerated power of Congress.
The voters have been misled by many people into believing they can have a great economy if the Congress never uses their first enumerated power. Liberals have stopped quoting Justice Holmes. Economists have chosen to ignore the data and reality and treat taxes as a dead weight loss, so even the liberal economists who attack Obama reject Obama’s attempt to get Congress to exercise the first enumerated power of Congress.
Krugman, and Binder just tonight, have said that the first enumerated power of Congress is harmful when unemployment is high.
But Hoover and the Democratic and conservative Congress in 1932 used the first enumerated power of Congress to hike taxes to the highest rates ever. A couple of years later, FDR signed off on Congress using their first enumerated power to hike taxes to the highest rates ever. And five more times, FDR signed off on Congress using their first enumerated power of Congress to hike taxes to ever higher and higher rates.
Job creation after Hoover signed the first tax hike took off, and if jobs were created as fast as FDR’s first two terms after the 1932 tax hike during Bush’s two terms, the number of employed in 2009 would have been 40 million higher.
The reason taxes need to be hiked is to pay the debt service on the debt needed for investing in the public infrastructure that has deteriorated and that has been under investing in and thus makes the US increasingly uncompetitive in the global economy. The taxes must remain high because the debt will require decades to repay. We need to greatly improve the nation’s transportation system, and also make the US economy independent of the swings in global oil prices.
This is fundamental capitalism.
Building capital requires labor that is limited only by the ability to go into debt, which in turn is limited only by the revenue that pays the interest on the debt and pays down the principle.
FDR did not engage in deficit spending anymore than Amazon or google engaged in deficit spending. Both were capitalism in action: investment in capital created revenue that made both quickly profitable and able to pay their debt (debt in the form of venture capital and then stock).
The wars in Iraq and Afghanistan were poorly run because they were free lunches, no one was charged for the wars, and government charges with taxes. The American Revolution was headed to failure, but then the States agreed to pay for civilized society, and to pay taxes to service the debt run up in the Revolution.
Bush, consistent with Republican policy, felt the wars should paid for the same way the Continent Congress did, with worthless debt, worthless because Republicans reject taxes to repay their debt while in office, or run up by Republicans before them.
Obama is not the problem; the Republicans in Congress are the problem.
Obama is not the problem; the voters who believe the Constitution is correctly interpreted by the Republicans they vote for are the problem.
You could have Ralph Nader as president and the result would be exactly the same: no one fighting for jobs. Sure, Ralph might flailing around blaming corporate greed or corrupt money in politics, but their would be no jobs program because the voters will keep electing Republicans who consider the first enumerated power of Congress unconstitutional.
After all, the Republicans voted overwhelmingly to make the first and second enumerated powers of Congress unconstitutional.