Former Alaska Senator Ted Stevens was the object of considerable ridicule for his support of the infamous $400 million "Bridge to Nowhere." This played a big role in his defeat in the last election.
It is appropriate that members of Congress pay a price for their support of wasteful projects that serve narrow constituencies, but this is not a major source of harm to the country. The total amount of earmarked spending, like the Bridge to Nowhere," is less than 1 percent of the federal budget; and not all of this spending is wasteful.
By contrast, many members of Congress are doing far more damage to the country with their mindless pursuit of deficit reduction in the middle of the worst downturn in 70 years. This push for deficit reduction could do more damage to the economy and cost more jobs than 1,000 Bridges to Nowhere.
The basic story is straightforward and should be well known to anyone in a policy position. The collapse of the housing bubble reduced annual demand from the private sector by almost $1 trillion. Huge overbuilding of both residential and non-residential real estate led to a falloff in annual construction spending of close to $500 billion. The loss of more than $6 trillion of housing bubble wealth has forced consumers to cut back their annual consumption spending by close to $500 billion.
The only force that can replace this $1 trillion shortfall in demand is the federal government. The government can spend based on the confidence of the public in the long-term strength of the U.S. economy. This means that it can run large deficits with little fear of either the sort of investor panic that has recently afflicted the Greek economy or inflation.
With the unemployment rate near 10 percent and the vast amounts of idle capacity almost everywhere, we have more to fear from deflation than inflation. All measures show that inflation is very low and falling, as would be expected in an economy with so much slack.
In spite of a situation that demands more government stimulus to boost the economy, deficit hawks in Congress are now demanding cuts in spending to reduce the size of the deficit. This effort will slow growth and throw people out of work. Therefore these deficit hawks deserve serious ridicule for doing so much harm to workers and their families.
Today's object of special ridicule is Pennsylvania Congressman Jason Altmire. Mr. Altmire insisted on paring back a package of unemployment benefits and aid to deficit strapped state governments. Altmire told the Washington Post: "We've hit the wall. We've come to the tipping point where we're not going to do anymore... I think the case can be made that there are still more people who need jobs than there are jobs available. ... But what's the limit?"
That's pretty good. The unemployment rate is at 9.9 percent. Prior to the recession, unemployment had not been this high in 27 years, and Mr. Altmire thinks: "the case can be made that there are still more people who need jobs than there are jobs available."
This is not a marginal call. It's kind of like saying that AIG may have become somewhat over-extended. Unfortunately, Mr. Altmire has apparently left planet earth and decided that his top priority is reducing the size of a supplemental appropriations bill.
Altmire and his collaborators managed to squeeze $30 billion out of the bill. If we follow the methodology used in a paper written by Obama administration economists Christine Romer and Jared Bernstein, Altmire's cuts will reduce growth by roughly $50 billion. This will throw more than 300,000 people out of work.
That's a great thing for members of Congress to do -- throw people out of work. It really helps their children also. Mr. Altmire can explain to the kids whose parents are forced to give up their homes that they will have a lower interest burden on the debt (which is not even true). The kids will no doubt thank Mr. Altmire for his consideration.
In fairness, Representative Altmire probably doesn't know squat about the economy. He probably just takes his cue from wealthy friends who enjoy muttering about "fiscal responsibility" when the issue is items like unemployment benefits and aid to state and local governments.
But, ignorance is not much of an excuse when you are crafting economic policy. Because of Mr. Altmire's blind pursuit of deficit reduction, hundreds of thousands of people will suffer needlessly and the nation as a whole will see growth curtailed. If ridicule were proportional to the damage done by their policies, given the treatment of Senator Stevens, we would have to start a new television network dedicated to this purpose to ensure that Representative Altmire received the proper level of ridicule.
Richard (RJ) Eskow: Law and Order: AIG
Last Wed. a group of us congregated outside Altmire's district office in Aliquippa, PA, with signs against cuts in Medicare and Social Security. Since Altmire was in D.C., his office manager came out and gave us a set of clipboards, each with a pen, to write our comments on his comment forms. After she went back inside, we noticed that all the pens were the same--they all had "Highmark Blue Cross/Blue Shield" written across them.
So, who is Jason Altmire representing?
President Obama, we are waiting for you to lead. You were right there whipping up Dem votes for Bush-Paulson Wall street welfare scheme a.k.a the Bailout. you twisted arms of progressives who were blocking funding for Afghan war. You were out getting votes for confirmation of Bailout Ben bernie, beating back comprehensive audit of the federal reserve and the breakup of TBTF banks. Now, go and bat for main street. keep in mind Deeds and Arthur Davis - you can't keep throwing your base under the bus and expect to win,
Community investment will have to come direct from the government at this point and they aren't willing to do it. By "giving" it to middle men to "loan' out, they get campaign contributions for said favor.
Middle men, by nature, will skim as much as possible off the top before letting it "trickle down."
It is the Increased War Spending and Corporate Subsidizing Bill - make the OTHER side break it down how it it will NOT be that.
I hope he's a lawyer, cuz he's gonna need a job soon.
However, he clearly has his head up his ^@%@$#@ -- oooooh, did I say that? I am so utterly disappointed in Congress and how they truly don't understand, or appreciate, what millions of people are going through who have been laid off. Even if they have no sympathy and/or understanding of our situation, there is one situation which they should pay attention to. Should these jerks pull the plug on unemployment benefits, the foreclosure rate will sky rocket (moreso than it already has), there will be people with health care issues and no health care insurance, and a significant number of the baby boomers will be left out in the cold with no help from our government.
I have worked hard, always paid taxes, voted in every election because I do believe that there are people who care but perhaps there aren't any politicians that care anymore.
It's "Bubble Up", not "Trickle Down". Assisting the unemployed puts money back into circulation quickly and benefits a larger population.
Come on Altmire, show some spine.
The biggest hurdle to solving our long-term problems is the amount of national debt. Our debt stands as a monument to how the Socialist has squandered the wealth of the American people.
The only way to reverse the decline of the of the American people’s standard of living is to stop spending more then what is being received. Taking wealth away from and punishing those who currently have it will not solve our problems, it will only get spent and then we will all have less.
The only way to solve our economic and social issues is by pursuing policy that encourages the creation of wealth. The Federal government’s policies of forcing financial institutions to lend mortgages to those who did not qualify created nothing more than a false housing bubble and then a hard crash.
After seeing how badly the socialist in the Federal Government has mismanaged our money, it's hard not to come away thinking: "Why would anyone ever do business with that firm again?" Likewise, after even a cursory examination of the treatment of the American middle class by the Socialist over the past few decades, one should also wonder why anyone would ever do business with that crowd again. Your argument is just more of the same, more debt, more government control, more lackluster growth, more unemployment, and more socialism.
Translation: I have no argument.
Get real! It took the Bush Administration eight years to dig this hole and throw us into it. Just take a look at the distribution of the money in our system. It's all at the top and from the way things are going, it's going to stay there. And without having that money flowing though our economy, our economy won't be viable.
But if they absolutely have to balance the budget, they should consider rescinding the Bush tax cuts, shutting down the wars in Afghanistan and Iraq, and closing all our foreign military bases. That would, at least, come close.