As we see more and more information about the Republican plans for for “austerity” and the budget cuts, we see more and more that all they are offering is the same one-trick pony that they have proposed to solve economic problems since the days of St Ronnie of Raygunz.
Now why would I put the term “austerity” in quotes? Because every time the Republicans make a proposal to cut spending, they also demand a tax cut. From Reuters:
(Reuters) – Republicans in the House of Representatives united on Friday behind a 2012 budget plan slashing trillions of dollars in government spending while cutting taxes — two achievements conservatives say are necessary ingredients for a deal to raise the U.S. debt limit.
In fact, we have quite abundant objective, verifiable evidence from the last thirty years that cutting taxes does not increase revenues nor does cutting taxes cause businesses to create jobs. Yet for some strange reason, the people who continually propose cutting taxes because “it increases revenues and creates jobs” are considered “very serious people” by the Beltway Village Idiots Pundits. However, if tax cuts created jobs and increased government revenues, the past decade would have been a decade with some of the greatest job growth in the history of the US as well as shown a continued decrease to the national debt instead of the exact opposite.
Friday’s (April 15) NY Times had this article describing the impact of the recent budget deal:
It may have kept the federal government from shutting down, but the budget agreement that President Obama struck with Congress will make it harder for some struggling cities to keep their police stations and firehouses staffed.A program that helps cash-starved cities hire police officers — which has become highly sought-after in recent years as the economic downturn has forced cities from Camden, N.J., to Oakland, Calif., to take the rare step of laying off police officers — was cut by $52 million.
The reduction means that the program, under which the Justice Department awards cities grants that pay the full salary and benefits of new officers for three years, will be able to pay for roughly 200 fewer officers this year than it did last year, when it paid for 1,388 officers.
The budget deal also changed the rules governing a similar program that helps struggling cities hire firefighters — reducing the grants so much, union and city officials said, that many cities may find themselves unable to take advantage of the program.
Fewer cops. Fewer firefighters. Fewer jobs. Reuters presented it this way:
The resolution to keep the government running for the rest of fiscal year 2011 reduced Community Development Block Grants by 16 percent.Cities, towns and counties rely on the relatively small program to fight homelessness and blight. For months they have campaigned to preserve every cent of the grants as states pull back on aid to local governments.
The cut of roughly $600 million threatens the economic recovery in many places because it will end job-creating projects, said a coalition of groups representing local governments, including the National League of Cities and the Conference of Mayors.
…snip…
Mostly, states leaders are worried about cuts in spending on services their residents heavily use and they fear they will have to step in with their own funds to make up for the reduced dollars.
The Washington Post today had this article on the cuts to Jobs Training programs:
Facing recession-weary audiences across the country, President Obama frequently highlighted the possibilities of job training for the unemployed.The new fields of green technology, advanced manufacturing or clean energy would require new skills that job training programs could provide. More education would bolster the workforce and the economy. And at a community college “summit” in October, Obama touted the colleges’ role in providing workers with skills to take advantage of new opportunities.
…snip…
But details of the budget compromise this week between the president and congressional leaders show federal funding for job training programs has taken a significant hit — more than $870 million in all. Included are cuts to occupational training grants at community colleges, green jobs classes and a program to help low-income older people acquire work skills.
Now I happen to believe that the problems with the economy do not stem from people not having the necessary skills but fall on the lack of demand for goods and services. Even so, if the Republicans actually had a jobs plan of some sort and actually believed that it was a lack of skills causing the high un and underemployment we’re experiencing, then it would seem that creating and maintaining viable training programs would be at the top of the list.
New York Representative Joe Crowley really said it all on the floor of the House the other day – and never opened his mouth.
And because I can:
Cross posted from Just A Small Town Country Boy



23 Comments

Of course, I generally agree. But I think the point applies more specifically to tax cuts for business and the wealthy. Tax cuts for working people do appear to be successful in reving up aggregate demand and helping to create jobs.
in addition, budget cuts do mean job losses directly, since workers employed directly or indirectly by Government programs lose jobs. But also, it’s deficit cuts, more generally that cost jobs since the smaller the deficit, the less the Government is injecting into the non-Government economy in the form of net financial assets. If the cuts get so great that the deficits aren’t great enough to match the current account deficit plus private savings desires, then one or both of these sectors will have to get smaller, and we will be poorer.
The ‘pundits’ are all employed by corporations that benefit from tax cuts … “It is difficult to get a man to understand something when his salary depends on his not understanding it.”
http://www.goodreads.com/author/quotes/23510.Upton_Sinclair
Oh, and … “Nice diary, good job.” ;-)
Yes, budget cuts are job killers. They are sick in the head to propose such things.
But are the threats of the Republicans credible?
Would Wall Street really permit the United States to go into default?
Would a government shutdown be a political plus for the Republicans?
Why does our President roll over and play dead every time the Republicans make an idle threat?
Back when the Democrats controlled both the House and the Senate, President Obama was all about bipartisanship. Now that the Republicans control the House, President Obama is all about surrender.
I disagree.
Obama was never about surrender.
He is about sandbagging.
Of course,they all know budget cuts result in job cuts.
That’s the idea. Banks/Corporations are in total control, they call all the shots now.
A desparate populace will work for peanuts.
The result is a truly competitive workforce with the Third World.
Open your eyes.
Budget cuts = job cuts seems intuitively obvious and a reasonable concern. The gov’t does generate jobs when it purchases goods and services in the economy.
But, harder to justify, may be how much the gov’t pays people and businesses to produce (or do) whatever.
Also the purely economic arugment for gov’t spending, insofar as jobs are generated, would seek a net gain in jobs unrelated to and separate from the needed services or goods, themselves. Otherwise some conflict of interest would be in play to justify a course of action there.
This net jobs gain would also have to surpass some offsetting job losses elsewhere caused by the gov’t competing with the private sector for funds.
There can’t be a firm answer this unless one had the wherewithall to track the life history of a dollar bill (every dollar bill!) as it wends its way through the economy and compare all alternatives it encountered enroute — did the gov’t seize this dollar at some point for its own use, or not? What were the benefits or costs as a result?
None of this will ever be firmly known since so many variables are in play. Still it’s conveniently gray enough for any of us to apply our partisan inclinations one way or another. Triangulation, sound bites, etc., will ensue and save the day, no?
When more people die in fires because of an understaffed fire department that is doing its best with the budget cuts, and when more people die from crime in the streets because there are not enough police officers, who do we blame?
It is very obvious that the Republicans do not care what happens to the people in this country as long as they get their increased benefit checks at our expense.
Take away the debt spending and the US economy is ~12 trillion rather than 15 trillion;
but that is still a respectable number.
Austerity would be a good antidote to consumeristic narcissism and a hat tip to the environment.
But unfortunately, the political drones in this country are going to compete to bribe the people with dept spending so that they can continue to be the train conductor rather than “the other guy”.
That the train is approaching a cliff? What is the refrain? “In the long run we’re all dead”?
Maybe the Republicans (and their enablers, the Democrats) think their plans will save America. Unfortunately, like the famed Vietnamese village, they will “save” it by destroying it.
OOPS! Spelling. Should be “wherewithal” above. Sorry!
So your solution is to cut critical services such as police and fire?
Now why would I wager that you are against increasing taxes for any reason whatsoever?
We’re all going to die in the long run, so it doesn’t matter if more of us die in the short run from malnutrition and lack of health care, Am I following you correctly?
We could certainly use austerity as long as the mechanism isn’t throwing people out on the street.
Why should cops in Camden be financed with taxpayer funds funneled through Washington? Makes no sense.
This is a serious question/request. Where is the data.? Can you provide links or references? I have tried to find some good succinct articles and am so far unsuccessful. I know it to be true and the 30years of claims to the contrary the most scurrilous of lies. But the claim regularly goes by unchallenged. It is the single plank in the money platform of the right. We need to get the hard data out there and demand the media give it at the least equal time. Of course all of us can do our part on blogs also.
Well, it makes more sense than giving corporations tax breaks to send US jobs to other countries.
Well, the US economy needs to create 125k jobs per month (1.5M per year) just to break even and absorb the new people entering the labor market. The rationale for the Bush (now Obama) tax cuts was that the cuts in ’01 and ’03 would create all these jobs.
Yet according to this from wiki, there were basically no jobs created during the Bush years.
The only thing the Bush tax cuts did was help the income and asset gap between the very top and the rest of us to grow larger.
This from the Cleveland Plain Dealer last October has some figures as well showing far better job creation under Dem presidents in the last 30 years versus for Republicans
This should at least be a start for you.
Oops. Those job creation number are for 30 years of Dems and 36 years of Reps going back to Truman and the end of WWII
Thanks so much. I really feel it’s time to challenge that bit of fantasy that even our president seems to believe.
Also, all we have to do is look at the employment picture over the life of the bush, now obama, tax cuts. I think that the verifiable evidence is there: the job market is very constricted and banks are not putting money into circulation to create jobs, they are just putting money into more financial instruments.
Perhaps I’m imagining things, but it seems to me that there is one troll patrolling FDL by using sock puppet names. I could be wrong, but sometimes two or three different names throw out the same deliberately wrong statement after it has been answered before.
I don’t have citations at hand. Either the Congressional Budget Office or the Congressional Research Service (maybe both) should have relatively objective figures for both the relationship between tax cuts and revenue and tax cuts and job creation. They are very different questions.
CRS has more on the web than it used to. But generally you have to ask a member of congress’s office for CRS reports. (You’re supposed to feel grateful.) It’s a straightforward process. Writing or emailing to describe what you want works better than calling. And CRS & CBO studies stand up a bit better than many sources when you’re arguing with people, although Republicans in Congress have started to call their work a matter of opinion.
It’s reported at businessinsider:
Bank Of America Analyst Advocates The “Unthinkable” — An Intentional Default On US Debt
http://www.businessinsider.com/bank-of-americas-jeffrey-rosenberg-says-the-us-should-default-2011-4#comment-4dabb2ffcadcbbdd7d180000#ixzz1JqLyyKOF
(Come back here afterward. I don’t want my name becoming mud here.)
I don’t know if it’s true as reported so I’ll address this
as follows:
Dear Mr. XXXXwhatsis:
Wow.
That’s taking “Loose Lips Sink Ships”
http://home.comcast.net/~pflyersboy/victory/victory_at_sea_theme.mp3
and replacing it with “Advertise What’s On Your Mind.”
Was that a plot for a would-be Rob Schneider or Jim Carrey movie?
To the Chinese who think we’re simply nuts. It’s freedom before your eyes, even to publicy be a XXXXwhatsis, and even I’ll protect people’s right to be XXXXwhatsises (also guaranteed no interference on being happy .)
I’ve a better idea. Stop giving huge tax breaks to the uber-wealthy financed by China and paid for by the middle class and its kids and grand-kids; tell Mr. Lieberman it was not nice blocking the public option in defense of a health insurance cartel statutorily immune from anti-trust laws; and tell Mr. Obama that despite his less than very effective efforts, even what he accomplished in the nature of what’s progressive is not being taken seriously.
To wit:
http://articles.latimes.com/2011/jan/05/business/la-fi-insure-rates-20110106
Also, stop simply up-marking TBTF bank reserves in support of Ponzi schemes after-the-fact at the expense of retirees’ nest egg earnings and stripping the benefit from those who made good decisions in favor of the creeps who caused this mess and who take that money and give themselves bonuses and invest it overseas, particularly when other nations who’ve come through
this stuff have done so by not simply rewarding the bad guys.
see:
http://online.wsj.com/article/SB122265260912184329.html
And the cash from those billions / trillions in tax cuts for the wealthy didn’t disappear. It’s sitting
in their offshore accounts.
http://sites.google.com/site/evernewecon
David Stockman a long time ago pulled the magician’s cape off the cut taxes/grow revenues hokey trick of Voodoo Reaganomics. This is not unknowable in 2011. Selling Reaganism as still being valid or successful/competent political policy is pure dereliction here in 2011 and is The Politics Of Deception And Duplicity.
What is GE paying in corporate taxes again? None? Maybe all Americans should be no paying taxes — why can’t we all get the GE Pay No Taxes Deal?
Oh wait — if no Americans pay taxes then who pays for the federal,state,city and county governments we have now?
Or do we privatise American government functions entirely to mimic a GE styled run regime of For Profit Capitalism/Corporatism with little or no social/society obligations?
Go ahead — cut government spending 100%. Cut taxes 100%. If doing some fraction of such cuts is so good then why wait for the Ultimate Goodness of doing so completely?
The insanity of too few taxes and too little government spending still not clear here for Americans who are grass eater types?
Still foggy as to why Barack Obama is not giving any of this “the deficit is awful//must cut government spending and Rich America’s tax load is too much” Bovine Shit Fling from knaves like Paul Ryan the full mockery it deserves?
G.W.Bush and Dick Cheney spent hundreds of billions of $$ while in office doing war and occupation while also cutting American tax load and doing No War Taxes. Where was this acute concern then about spending cuts or taxing for what was spent by WashingtonDC during that eight year circus performance?
Barack Obama is either a dupe or a fraud for having any of this Reaganism Paul Ryan now is doing stand up comedy in Congress for.
Ronald Reagan famously stated government had no solutions but was the problem. In view of how Reagan proceeded to run the USG during his eight years in the WH Reagan’s regime seldom failed at proving how it’s version of government could create problems —
>> putting a hack like James Watt in charge at Interior
>> or putting Caspar Weinberger at DOD and William Casey at CIA
>> putting charlatans like David Stockman or clowns like Ed Meese in government
– making government the “problem” a likely outcome.
The D Party in 1980′s WashingtonDC played ball with Ronald Reagan and his WH regime’s newly crafted Reaganism. Undermining and sabotaging decades of New Deal and Great Society D Party politics and policy choices. Doing so gave us the Paul Ryans and Scott Walkers we have in American government today.
We did not get where we are here in 2011 just because of the R Party and it’s Reaganism Crusade. The D Party has lent a helping hand time after time after time. Hell — Barack Obama (Fake D) evidently admires Ronald Reagan( Big R Star). Obama should be voted out of the WH in NOvember 2012 just for that betrayal to the legacies of FDR(Real D) and LBJ(Real D).
Reaganism is being preached these days by the likes of Paul Ryan and others of his ilk. They believe Reaganism worked and still works despite the fallacy of this position after thirty years of Knowable Fail being in plain sight to see. It is willed blindness to not see the economic/political fallacy and fail of Reaganism. If the current D Party is too stupidly led or just so craven anymore to not usefully resist Reaganism then to hell with the D Party and it’s rotted leadership.
Simply put — Reaganism does not work. After thirty years who still is not seeing this? What kind of useful idiot duplicity still informs any political view that Reaganism does work?
Barack Obama admires Ronald Reagan? What kind of Democrat could or would do that? No Real Democrat could or would or should.
Voting Barack Obama out of the WH in 2012 has now become The Politics of Seeing and Sight.