Monday, August 1, 2011

from The Daily Kost

That first round of cuts to discretionary spending might reduce some waste, but it would also undermine vital government services. At the same time, it would deplete the opportunities for easy spending reductions, making it more likely that second round of cuts had an equal, or harsher, impact. As Robert Greenstein, of the Center on Budget and Policy Priorities, pointed out in a recent statement about a different proposal, there's just no way to enact spending reductions of this magnitude without imposing a lot of pain. And contrary to the common understanding in the Washington cocktail party circuit, "pain" does not simply mean offending certain political sensibilities. Pain means more people eating tainted food, more people breathing polluted air, more people pulling their kids out of college, and more people losing their homes—in other words, the hardships people suffer when government can't do an adequate job of looking out for their interests.
More immediately, but equally troubling, this agreement would not address our most pressing economic problem: lack of jobs. On the contrary, by reducing deficits starting next year, this deal would do the very opposite of what virtually every mainstream economist now believes we should do: increase consumer demand by pumping more money into the economy. At one point, the debt ceiling agreement included promises to extend unemployment insurance and renew a break on the payroll tax. Those two would have provided a modest but very real boost to the economy (not to mention financial relief to people who need it). This deal would do neither. [emphasis mine]

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