Grow The Economy By Growing The Debate About It
Hey, have you heard about this thing called “the fiscal cliff”? Actually, the better question is: Have you heard about anything except the fiscal cliff? Nine months ago, the term had not even entered the media lexicon. And now it’s suddenly everywhere.
It was Fed Chairman and Neologist-in-Chief Ben Bernanke who, while testifying in front of Congress back in February, first used the term to describe the combined effect of the expiration of the Bush tax cuts, the payroll tax cuts and unemployment benefits, along with the beginning of across-the-board spending cuts (the so-called “sequestration”) that were part of the debt ceiling deal (technically the Budget Control Act) of 2011.
Whether or not we go over the fiscal cliff, around the fiscal curve, or down the fiscal slope remains to be seen — and no doubt heard about nonstop every day through the end of the year — but one thing is already certain: Our political debate has already gone over the cliff. In fact, it was sequestered long ago, when the acceptable parameters of this so-called debate were initially set.
Just look at the current state of the negotiations. President Obama’s proposal — delivered to John Boehner and Eric Cantor by Obama’s lead negotiator Tim Geithner — calls for $1.6 trillion in tax revenue over the next 10 years, the majority of which comes from letting the Bush tax cuts expire for those making more than $250,000, along with $600 billion in savings from entitlement and farm subsidy programs, and $800 billion from reduced combat spending. There would also be $200 billion in new spending for unemployment benefits, homeowner mortgage relief and infrastructure.
Republicans immediately took to their fainting couches. “Right now I would say we’re nowhere, period,” Boehner told Chris Wallace. But, in fact, these were the same terms the supposedly shocked — shocked! — Republican leaders had already heard from the president himself earlier in the year.
President Obama has mounted a campaign-style effort to go over the heads of congressional leaders and get the American people involved. Recently he appeared at a toy manufacturing company in Pennsylvania, proclaiming that the Republicans refusing to budge — and thus raising taxes for everybody — would amount to “the lump of coal” for a “Scrooge Christmas.”
The president ended his speech by saying, “So I want you to call, I want you to send an email, post on their Facebook wall. If you tweet, then use a hashtag we’re calling ‘My2K.’ Not Y2K, ‘My2K,’ all right? Because it’s about your ‘2K’ in your pocket.”
It’s really great that the president is appealing directly to the people. But why assume that the people will only respond to a direct appeal to their pocketbooks? Why not also appeal to the need to grow the economy, create jobs, rebuild our infrastructure and, yes, even take care of America’s unemployed? Where is the moral imperative — that can help connect us all — to rebuild the country?
The debate the country should be locked in right now isn’t about the fiscal cliff and the deficit, but about the growth cliff and the 20 million unemployed or underemployed Americans. Economic growth for the fourth quarter is expected to be under 2 percent — well below what it needs to be if we’re going to substantially reduce unemployment.
Of course, if we actually did worry about growth and did something about it, that would go much further toward reducing the deficit than cuts to social programs. “The boom, not the slump, is the right time for austerity,” John Maynard Keynes said, and it is as true now as when he said it in the 1930s.
But instead of trusting the country to understand that, the president has instead largely acquiesced to the Republican mantra that when American families have to tighten their belts, so does the government, and has chosen as his distinction-drawing principle the disagreement over tax cuts for the wealthy.
The president has the wind in his sails. He’s just won an election — convincingly. And he’s facing an opposition whose exhausted vision for the country has curdled into, simply, tax cuts for the wealthy and forever-unspecified loophole closing. The moment is ripe, and people are ready, for something more than an appeal to use the hashtag “My2K.”
Republicans have termed Obama’s proposal “fantasyland,” but it’s a measure of how far we’ve gone into fantasyland that this is the debate we’re having at a time of near-recession, and of dismal prospects for 20 million unemployed or underemployed Americans. It’s important to remember that this debate didn’t go off the cliff by itself. This was no act of God — it was entirely manmade.
It would be great if we could channel some of the ingenuity we clearly possess for producing manufactured crises (debt ceiling, fiscal cliff, etc.) — and giving them catchy names — into solving our real problems. One start would be for the president to use his new, hard-fought political capital not just to beat the Republicans at this particular game, but to expand the playing field of the next one. The only way we’re going to grow the economy is if we grow the debate about the economy.
(Arianna Huffington is president and editor-in-chief of Huffington Post Media Group. Her email address is firstname.lastname@example.org.)
Photo credit: AP/Chris Carlson, File