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America Can't Cut Its Way To Prosperity

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Source: Cap Times



The U.S. economy is coming down with a bad case of austerity.

Only 165,000 new jobs were created in April -- far fewer than are needed to address existing unemployment and create positions for the millions entering the workforce.

More than 11.7 million active job seekers cannot find work. And that figure does not include millions who have given up looking or are severely underemployed. Add them in and real unemployment is at 13.9 percent.

"This is a classic 'hold-steady' report -- enough job growth to keep the unemployment rate stable but not much more," Heidi Shierholz of the Economic Policy Institute says of the latest news from the U.S. Department of Labor. "In good times, this would be fine, but at a time like this, it represents an ongoing disaster."

Why are things so slow?

In a word: austerity.

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"This month's abysmal jobs number -- 165,000 new jobs in April, barely enough to cover new people coming into workforce -- is a self-inflicted wound. Government austerity -- tax hikes and spending cuts -- is suffocating the economy, just when it needs air," says Robert Borosage, co-director of the Campaign for America's Future...

"And the perversity will get worse. The sequester cuts are only now beginning to hit. Austerity is driving Europe deeper into recession. China is slowing. U.S. exports will suffer. And Washington is about to descend into new self-manufactured crises around next year's budget and the debt ceiling. The positive signs in housing, the extraordinary measures taken by the Federal Reserve, the soaring stock market are undermined by Washington's failure."

Despite the fact that their approach has been discredited, there are still members of Congress who buy in to the fantasy that what's holding the economy back is government spending. Typical is Sen. Ron Johnson, R-Wis., who says that "to get the economy moving and generate real, self-sustaining job creation, we need to limit spending and reject more tax increases."

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John Nichols, a pioneering political blogger, has written the Online Beat since 1999. His posts have been circulated internationally, quoted in numerous books and mentioned in debates on the floor of Congress.

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