Who Says Grow Jobs Before Cutting Spending Everyone

Bill Scher



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This week, yet another poll showed the public puts creating jobs ahead of deficit reduction for the “top priority of the federal government.”

Are the masses simply pining for the candy of American politics? Should we instead follow the hard-headed advice from our elite economists and budget experts?

Fortunately, they are saying the same thing.

Leaving aside the hacks from ideological “advocacy tanks,” credible experts from widely varying political backgrounds all say the same thing: create jobs first.

There may differences of opinion regarding how to eventually reduce our budget deficits, but no one argues that we should embrace austerity now and risk a double-dip recession which would only deepen the debt.

Here’s just a sampling:

Federal Reserve Chair Ben Bernanke:

“I think that if [deep spending cuts were] that’s all that was done that the costs to the recovery would outweigh the benefits in terms of fiscal discipline.”

Former President of the Peter G. Peterson Foundation David Walker, and President of the Economic Policy Institute Larry Mishel:

“Though a concern, most of the recent short-term rise in the deficit is understandable. Furthermore, public spending can help compensate for the fall in private spending, and help stem the pain of substantial job losses … job creation must be a short-term priority.”

Economist James K. Galbraith:

“The hue and cry over deficits cannot sidetrack us from our true goals of full employment and sustainable energy … People need work. We face the challenge of climate change. This challenge must be met while also improving the quality of life, or it can never be met at all. The broad outline of a program is therefore plain. There is no mystery about it. In 1929, Keynes wrote, ‘there is work to do; there are men to do it. Why not bring them together?’ Today as then, it is that simple.”

The Simpson-Bowles deficit commission proposal:

“Don’t disrupt the fragile economic recovery. We need a comprehensive plan now to reduce the debt over the long term. But budget cuts should start gradually so they don’t interfere with the ongoing economic recovery. Growth is essential to restoring fiscal strength and balance.”

Nobel laureate Paul Krugman:

“The clear and present danger to recovery, however, comes from politics — specifically, the demand from House Republicans that the government immediately slash spending on infant nutrition, disease control, clean water and more. Quite aside from their negative long-run consequences, these cuts would lead, directly and indirectly, to the elimination of hundreds of thousands of jobs — and this could short-circuit the virtuous circle of rising incomes and improving finances.”

Current Chair of the White House Council of Economic Advisers Austan Goolsbee:

“The most important thing is to get growth … We’re finally moving to phase two of growth — it’s a recovery, it’s fragile. That’s not the moment that you want to be saying, ‘OK, let’s pull the rug out from under the recovery.’ … We’ve got to preserve the seed corn for investing.”

Former Chair of the Obama admininstration’s Council of Economic Advisers Christina Romer:

“…the question is not whether we need to reduce our deficit. Of course we do. The question is when. Now is not the time. Unemployment is still near 10 percent in the United States and in Europe. Tax cuts and spending increases stimulate demand and raise output and employment; tax increases and spending cuts have the opposite effect.”

Former Chair of Reagan administration’s Council of Economic Advisers Martin Feldstein:

“in the end, [the stimulus] just wasn’t big enough, and I think we all recognize that now.”

Former Chair of Clinton administration’s Council of Economic Advisers Laura Tyson:

“We need targeted policies for jobs and right now, the deficit is not the issue.”

Former John McCain presidential campaign economic adviser Mark Zandi:

“The recovery needs some more help. It would be prudent, I think, to provide some additional help…”

Economist Mark Thoma:

“There are two problems that we need to fix. One is the employment problem that exists right now, and we are not doing enough to fight that problem … The second problem is the long-run imbalance in the budget, and that can only be solved by health care reform that brings the growth in costs down to a sustainable level. Whether we spend more or less to fight the employment problem that exists right now has little to do with solving this problem, and there’s no reason at all for concern about the long-run problem to stop us from doing more now.”

Nobel laureate Joseph Stiglitz:

“…what matters is not the deficit itself or the short-run national debt, but long-run levels of the national debt. The country should be looking at its national balance sheet. Debt reflects only the liability side. In assessing the economic strength of a firm, no one would look just at its liabilities; they would also look at its assets. The single-minded focus on deficits and short-run debt is thus fundamentally misguided. Spending on assets (investments in education, technology, and infrastructure) thus may improve the country’s strength.”

President of The Levy Economics Institute Dimitri B. Papadimitriou:

“If calls to drastically reduce the deficit succeed, and federal spending is radically turned down now, the result will be comparable to cutting the engine’s fuel supply. The roll back downhill will be swift, horrific, and potentially out of control.”

Co-Director of the Center for Economic and Policy Research Dean Baker:

“…the predictable result of austerity is slower growth and higher unemployment. The UK has volunteered to be our guinea pig and test this proposition. For now, it looks like things are going just as standard economic theory predicts: the economy is slowing and unemployment is likely to rise.”

Economist Robert H. Frank (co-author of “Principles of Economics” with Ben Bernanke):

“There is no conflict — absolutely none — between our twin goals of putting the economy back on its feet and reducing long-term deficits … Spending an extra dollar now [on infrastructure investments] to save two dollars three years from now is an investment with an annual rate of return of more than 18 percent. Making that investment with money borrowed at 3 percent would not only put people to work immediately, but would also help balance government budgets.”

Statement from 300 economists and civic leaders, organized by Institute for America’s Future:

“Today there is a grave danger that the still-fragile economic recovery will be undercut by austerity economics. A turn by major governments away from the promotion of growth and jobs and to premature focus on deficit reduction could slow growth and increase unemployment – and could push us back into recession.”

It is precisely this consensus view, so absent in our political media-driven discourse, that will be elevated at our March 10th “Summit for Jobs & America’s Future.” There is no logical reason to ignore both the will of the people and the counsel of our finest experts.

But even the truth often needs a push.

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