Jobs are scarce, wages are declining, health benefits are being reduced and basic services – from teaching to policing to food safety inspection – are being cut. This thing isn’t working for working people.
Mitt Romney and Republicans say they have the answer: cut taxes and cut spending. But, as economist Paul Krugman has shown, we’re already essentially doing that. Republicans forced President Obama to sustain the top end Bush tax cuts to gain support for the payroll tax cut and extended unemployment benefits that have been vital in keeping the economy from tanking. And government spending – local, state and national – is going down, not up. Governments are shedding workers, not adding them. You can’t cut your way to growth.
There are common-sense things that should be done. Interest rates are now cheaper than free. (Interest on U.S. Treasury 10-year bonds hit a record low 1.45 percent last week, far less than inflation.) That means the U.S. can now borrow money for no cost to rebuild its aged infrastructure. It will never be cheaper to do so. And with the construction industry flat on its back in wake of the housing collapse, there are skilled workers willing and ready to work. Roads, bridges, airports, sewers, mass transit and retrofitting public buildings for energy efficiency – all these will produce economic benefits with greater gain than the borrowed money will cost. As the conservative Financial Times editorialists concluded, “whatever is invested at these rates is likely to pay for itself in higher growth and revenues.”