The drought in Texas on Friday was so severe that this month, the city of Kemp shut off the city's water, leaving hundreds of people in the small North Texas town without a basic necessity for two days. Kemp's pipes haven't been updated in decades. Consecutive weeks of 100-degree days have increased demand on the city's water system, making water more scarce as pipes break down. But as our public infrastructure crumbles, so does the spirit of the unemployed and underemployed as they face the harshest economy in memory.
Though this Great Recession lies on the verge of becoming a depression, the private sector has been growing jobs in line with normal expectations during an economic recovery. The real drag on job growth is in declining public sector employment. Our unemployment crisis is a direct result of budget cuts handed down by state and federal lawmakers.
Whether private or public sector, when more people are out of work in a consumer economy, demand for goods and services inevitably goes down. And with less demand, businesses have no choice but to lay off workers. We need jobs to fully recover, but jobs won't come about until demand picks up. Demand won't pick up until people have money to spend. So why are our leaders hell-bent on cutting public sector jobs when we need them most?
Texas Gov. Rick Perry is being lauded as a job creator in the midst of recession. But as Paul Krugman pointed out last week, those jobs were a result of population growth, not Perry's anti-government economic philosophy. The same governor whotold Glenn Beck that the government doesn't create jobs was in charge while 47 percent of all government jobs were added in his state. And the bulk of these jobs were in public education and health care -- two sectors that will be forced to lay off tens of thousands due to Perry's draconian budget.
Rather than cut recklessly, Perry and other GOP leaders should recognize the necessity for public sector job growth, and put people back to work by rebuilding our cities. 75 years ago, FDR put 8.5 million Americans to work rebuilding our cities with an $11 billion investment. The jobs created through the Works Progress Administration put nearly a quarter of America's unemployed back to work in the middle of a crippling depression. During the WPA's 8-year stint, America's unemployment rate decreased from 20 percent to 4 percent. Adjusted for inflation, a similar investment today would be roughly $1.7 trillion. That sounds costly, but there are two easy solutions.
A financial speculation tax on Wall Street bankers who deal in risky, abstract financial instruments like credit default swaps and derivatives could raise $1.5 trillion in ten years. Closing tax loopholes that enable multinationals like Bank of America and GE to dodge billions in taxes every year could generate another $1 trillion in a decade. What better way to dig ourselves out of this recession than taxing the same corrupt bankers and corporate tax dodgers who caused this crisis in the first place?
By simply creating a new WPA-style jobs program, we could lower the unemployment rate by several points, rebuild 20th-century infrastructure and accommodate the needs of a 21st-century society. But until we come together to elect leaders that will take that step, all we can do is pray. Maybe Rick Perry can help out with that.