Deficits are not the Issue
Despite claims to the contrary, our economic recovery has been backsliding. Only ten million jobs of the 20 million lost have been regained, and many will never return. Yes, the stock market is roaring along, but it is not a bellwether of the economy.
This COVID-19 recession is unique in that it was very abrupt and extremely deep. Also unusual was a quick return of some temporary job losses as fear subsided. A robust recovery will depend on BOTH the path of the pandemic globally and stronger investments to disadvantaged populations and sectors of the economy most affected.
After the 2008/2009 fiasco on Wall Street, recovery from the Great Recession took 6 long years, even without the complication of a pandemic. At that time Democrats had also seen the need for a very large stimulus package, but instead they were persuaded to lower their sights and compromise with Republicans. They do not wish to make the mistake of another long, weak recovery.
“Many economists agree that our [spring] fiscal stimulus…was too modest compared to the severity of the economic shock” (www.ilr.cornell.edu,August, 2020). Now is the time to be bold.
I applaud the ten Republicans who presented a bill for discussion, but it came nowhere close to what President Biden and his economic advisers believe is needed. If Republicans truly wish for bipartisanship and some reduction of the stimulus package, I believe there could be hope for compromise by targeting direct checks only to Americans who have been the hardest hit by the pandemic."
Frontline workers who are keeping us fed and essential services operating, often earn too little to support a family or buy health insurance. Even when working forty hours a week, the current minimum wage provides only a $15,000 annual income.
States and local governments are also facing a crisis due to falling tax revenues and increasing costs due to COVID-19. It is expensive to manage vaccinations, provide more first responders, safer schools, etc. If employees must be laid off for budgetary concerns, the whole community suffers. This need is NOT due to mismanagement by states.
Economic shock caused by the pandemic will have long-lasting impacts as corporations take advantage of the dislocation to re-engineer operations, and work styles will permanently change. Now is the time to address both fundamental economic weaknesses and the inequities plaguing American society.
Republican concerns over growing deficits are disingenuous. Where was their concern when our nation's annual budget deficit doubled during Reagan’s eight years? Or when Bush squandered an inherited budget surplus on a tax cut, two expensive wars, and a bursting housing bubble which, by 2009, had taken our annual budget deficit to over $1 trillion?
After 2012 our annual budget deficit was gradually reduced to approximately $440 billion under Obama.
But in 2018 and 2019 Republicans again raised our deficits with another tax cut, using the same Reconciliation Process for which they now criticize Democrats. According to the Treasury Department, during 2019 our annual budget deficit soared 26%, topping $1 trillion for the first time since 2012. Where was their concern then?
For too long Republicans have only decried budget deficits when spending was an attempt to lessen inequalities in our system, not when it was spent on their priorities.
"Another Point of View" is a column written by rotating authors dedicated to providing a variety of perspectives on life and politics.