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.