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The August congressional recess is fast approaching, and millions of Americans are out of work. State and local governments are considering massive layoffs. Small businesses are unable to get the lending needed to hire again.
The question that looms large is: What should Congress do?
The Joint Economic Committee, which I chair, Friday released its annual report on the economy, detailing the lasting effects of the Great Recession and the recovery now under way.
So here is my congressional to-do list:
First, extend unemployment benefits, which the Congressional Budget Office ranks as one of the most cost-effective tools for boosting growth and employment.
Second, provide critical temporary aid to state and local governments, to help avoid additional layoffs and service cuts.
Third, increase access to credit for small businesses.
Now it's not as if I would really be against these things.
I mean unemployment benefits NEED to be extended. But let's not kid ourselves about that boosting growth. If that were so the more people unemployed, the greater the benefits, the better the growth. So what kind of delusion is going on? Those benefits are to ensure that NOBODY IS STARVING IN THE COLD, and buying pasta and rent is not growing the economy. It's how to die slowly until the people who send you the checks don't have the money to send ANYONE, or until the money they send you is worth a loaf of bread. This level of delusion is, frankly, SCARY.
Aid to States and Local? Well it's so bad here that where schools are concerned only Ed Techs are being advertised for. There is no budget for more teachers. IMHO we are headed for an educational system with a few "master teachers" supervising 5-6 classes, and Ed Tech's actually teaching at $18k. I advised my wife to take that kind of job, and she agrees. It's a growth category. But where aid might cause more teachers for our children, where is that coming from? Who is ACTUALLY going to pay? If pension liabilities and growing payrolls are unfunded, who will pay? If the Fed sends $24 billion to Arnold this year for JUST this year, where does that actually come from? Maybe cut 2 nuclear aircraft carriers, all their aircraft and release all the servicemen and women (who will then be unemployed). NAAAAAAAH!
Who will pay? Why those kids, IF THEY HAVE JOBS SELLING INSURANCE TO EACH OTHER. And they'll pay and pay and pay.
Now I am a small businessman, and credit for small businesses is the grease that makes it all go around. But I have sworn off ALL credit. It'd be nice if others had credit to lease equipment. Now, the banks took the huge infusion of FED and BAILOUT cash and vastly increased their reserves. Large businesses are sitting, according to a liberal reporter (Fareed Zakaria), on $1.8 trillion and won't spend it because they have NO CLUE what is coming next from the ubergovt and are petrified that if their complete devotion is to anything but liquidity preservation, their huge companies might die and be shuttered, and or become the occupied territory of compulsory govt taken equity. So please tell me where this increase in credit is going to come from?
An SBA newly run by the same people who decided which Chrysler and GM dealerships to close, paid for with more loaned money?
The more debt this govt runs up considering the DEBT WE HAVE, the more insolvent we become, the more ravenous the govt will be to raise taxes to pay that debt and remove it from the economy, the more they will have power to exempt those 'deserving'.
PHYSICS.
It would be different if we were starting from a debt to GDP of 20%.
BUT WE ARE NOT
There are choices to be made and the people who are compelled to vote on them, well....
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