by Randolph T. Holhut
Chief of AR Correspondents
July 19, 2012
MITT GETS SCHOOLED BY THE OBAMA CAMPAIGN
DUMMERSTON, Vt. -- It's become as regular as the sun rising in the East - dismal U.S. unemployment figures come out, and the Republicans blame President Obama for the lackluster numbers.
This first-Friday-of-the-month kabuki dance has grown tiresome, especially when one considers how hard Republicans have been working over the past 3 1/2 years to prevent an economic recovery from taking place.
Start with the original act of obstruction: the 2009 stimulus bill. Virtually every economist worth his or her credentials said at the time that the country needed at least $1.2 trillion to $1.8 trillion of stimulus funding. However, the threat of a Republican filibuster in the Senate was enough convince Obama that an $800 billion package - a good chunk of it as tax cuts and credits - was the best they could hope for.
While it did manage to create or save 3 million jobs and enough economic demand to keep the 2007-08 recession from turning into a full-blown depression, the Obama stimulus bill was not enough to completely turn things around.
Two years later, when it was clear that more stimulus was needed, President Obama submitted a jobs bill, the 2011 American Jobs Act, that would have created about 2 million jobs and pumped nearly $500 billion into the economy. Despite public support, Senate Republicans killed that bill.
Last year, when Congressional Republicans threatened to allow the United States to default on its debts, the price that was paid to get Republicans to go along with a debt-ceiling increase was $900 billion in discretionary spending cuts over the next 10 years. According to the Economic Policy Institute, this year's cuts of $30.5 billion translate into an 0.3 percent drop in economic growth and 332,000 lostjobs.
This year, Congressional Republicans are pushing massive cuts to food stamps, unemployment benefits, heating assistance and other low-income programs, even though there is plenty of economic data that show that these programs have a far greater stimulative effect on the economy than tax cuts.
Between Republican obstruction on the American Jobs Act, and the party's insistence upon cutting jobs and programs in an economic downturn, many economists believe that the unemployment rate would be below 6 percent, had the party put the needs of the country ahead of its need to destroy President Obama by any means necessary.
Yes, there are many other reasons why the U.S. employment rate remains above 8 percent, and why the U.S. economy is not creating enough jobs to keep pace with the 125,000 people that enter the U.S. work force each month.
One can start with the eight years of Bush White House, and the economic combo platter of tax cuts for the wealthy, two wars waged off the books, lax oversight of the financial sector and the worst record for job creation of any President since Herbert Hoover. While Mr. Obama has been President for three years, he is still having to deal with the disastrous economic legacy of the Bush Administration.
Then there is the ongoing European debt crisis, which has sparked a recession on that side of the Atlantic, which means less money being spent on U.S. goods and services. Likewise, China's explosive economic growth is starting to slow, and that too is affecting the global economy.
But looming about all of this is the reality that President Obama cannot take the bold steps that are necessary to turn the economy around until he gets the votes in Congress, because the current bunch of Congressional Republicans refuse to put country ahead of party.
Sadly, enough people decided to vote against their best interests in 2010 and elect arguably the most reactionary and unhinged Republican members of the U.S. House that Americans have ever seen. Unless a large number of these people are voted out of office this fall, the chances of seeing any significant change in this nation's economic health are nil.
As a result, nearly 15 percent of the U.S. workforce - about 23 million people - remain either unemployed, under-employed, or have given up looking for work. A similar percentage of the population - 15.1 percent - is living in poverty.
You don't have to have a degree in economics to know that the best way to reduce these two figures is to create jobs, and the entity in the best position to do this is the federal government.
It's estimated that the collapse of the real estate bubble in 2007-08 took about $1.3 trillion in private annual spending out of the U.S. economy. As a result of this lost spending, state and local governments are cutting budgets laying off workers, and even going bankrupt - and prolonging the recession in many states. Had the federal government fully funded the economic losses to local and state governments over the past five years, it's estimated that 2 million jobs would have been saved.
The Federal Reserve has created $2.3 trillion in new money since 2008, and can print even more money if the federal government needs it. And the interest rate on a 10-year Treasury Bill now stands at 1.6 percent, a historic low. Yet the annual inflation rate remains under 2 percent. In short, the federal government can borrow money to create jobs, rebuild crumbling public infrastructure, or invest in new energy technologies, and do so cheaply without sparking inflation.
Yet standing in the way of these simple solutions is a political party that has no intention of spending money on things that will make our nation a better place to live for all of us - a political party that is so in love with power that it is willing to drive the country to the brink of economic collapse to defeat a Democratic president.
This is what the modern Republican Party has become. But few Democrats have the courage to call out the far right for what amounts to economic treason. Worse, President Obama seems content to allow the Republicans to paint his presidency as a failure while allowing them to evade their responsibility for preventing an economic recovery.
And as the politicians fiddle, the country burns.
AR Chief Correspondent Randolph T. Holhut has been a journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at firstname.lastname@example.org.