UNEMPLOYMENT & DEFICIT REDUCTION

The Republican leadership is counting on unsophisticated citizens and those who dislike the President on any account, to swallow the tea party/conservative economic fantasy that somehow unemployment and deficit reduction spring from the same set of problems and require the same solutions.  Of course this is nonsense.  The dilemma has always been that lowering unemployment requires more borrowing, lending and spending to jump start the economy.  Attacking the deficit requires the opposite.

Jobs are created through economic growth and demand for goods.  Balancing the federal budget, without raising taxes on wealthier Americans, requires the draconian cutting of federal entitlement programs and employment initiatives to the middle class and poorest of Americans. This makes less money available to grow the economy and impossible to increase the demand for goods. 

One recent example of this  point is that without the payroll tax cuts to the working poor and middle class and the extension of unemployment insurance negotiated by Congress last autumn, we would likely be facing a double dip recession.  Without these deficit increasing policies in place over the last 10 months (agreed to by republicans) there would have been inadequate individual cash flow to keep the economy moving.  To grow jobs you must grow demand by putting disposable income in the pockets of the unwashed majority.

Accordingly, it is irresponsible if not ludicrous to talk about cutting the unemployment rate and reducing the deficit through cutting entitlement programs in the same breath.  Any politician who claims to “have a plan” to do both “with the same policies” is either uninformed or untruthful, or both.  If Grandma cannot get her medicine under Medicare, she will not be shopping at Wal-Mart or buying graduation gifts for her grandchildren.

My view is that the Republican agenda is to lower the deficit on the backs of our less fortunate citizens by giving lip service to unemployment and to blame Obama for both spending too much and keeping unemployment too high.  Hopefully, the well informed independent voters who will ultimately be called upon to reelect our President will see through this voodoo economic fallacy.

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