The Republican attacks on extending the economic stimulus, on universal health care, on climate change legislation and financial reform all make reference to the exploding deficit and to the burden an immense debt may place on succeeding generations.
The ultra right and their Wall Street backers are issuing false alarms that all the reform efforts currently underway to address this crisis are too expensive and mortgage away the future of our children.
Right now the “deficit spending” so maligned by the right wing is actually essential to rebuilding our economy. It does not necessarily follow that doing more for workers today means their children will have less in the future.
Deficit spending works as long as economic growth in the future indeed adequately exceeds the borrowing costs (i.e. interest).
Here lies the critical importance of what the deficits are invested in. First, are they directly putting unemployed people to useful, creative work? Second, are they laying the necessary infrastructure, health, environmental and educational foundations for sustainable development and advancing incomes for all workers in proportion to the wealth they create?
Both these requirements must be met if the stimulus delivers the kick-start needed now.
The tough, down-to-the-wire struggles on health care reform, and upcoming financial reforms, may have blown some holes in the Obama administration’s hopes for more comprehensive change. Unemployment lines keep ratcheting up. If that does not turnaround, then a failure in public confidence in the stimulus and reform efforts could contribute to a stall in the recovery and another crash.
Investments in people pay quick returns. Economists estimate that every dollar spent on the first stimulus actually added only 60 cents to the deficit, and even that, for only a short term.
Millions of new, productive, and tax-paying workers will be the best long term cure for the budget deficit.
The message is simple: aggressively expand national service to put all who are able back to work – with educational and health benefits. And double down now on mass transit projects, green energy incentives and education- especially in sciences.
We cannot nickel and dime our way to recovery. Big, bold investments made today will create the bigger, better economy we want tomorrow.