PRIORITIES

Let’s make a list of our priorities. We’re a family of four or five, and without a job with a debt of say 50% of our last years’ income. So, the two pressing items on our list are; 1) we have debt that we’re having a hard time paying and, 2) our family needs us to go to work. Which goes first on our list as our highest priority, the debt or our job? Of course, finding a job goes first on our list, and then reducing our debt. Without a job our efforts to reduce our debts are impossible unless bankruptcy is available to us and even then finding a job should still be the most important.

That’s the dilemma we find ourselves in as a country, except bankruptcy is not an option. Unless we put our unemployed back to work…we’re not going to be able to address our debt dilemma. Most economists agree that if you reduce the unemployment rate to 4% the annual deficit goes away. That’s right…it goes away. Because, those unemployed workers begin impacting the economy in two ways, they start paying taxes, and they cease needing government assistance to live. It really is win-win! So why do the minority in congress, who make up only 35% to 45% of the elected congressmen and senators have such a difficult time making the list of priorities.

As a country we need to get the unemployed employed with infrastructure projects, retrofitting public and private building with energy saving devices, and public grants to create new green jobs building wind mills, solar panels, new technology batteries, and new green public and private transportation vehicles…cars, busses, and trains. This was the real miracle of the 90’s. The unemployment rate was the lowest in the country’s history. When those employed men and women were earning incomes they were paying taxes and we saw our financial condition improve to the point of having an annual surplus rather than an annual debt. This is the point that President Clinton left office and President George W. Bush assumed office. Rather than address those austere expenditures, the right now screams about, Dubya and his Republican accomplices promptly reduced our income by cutting taxes for the uber rich, engaged in two wars, and promoted the idea that deficits don’t matter. That’s what Vice President Cheney actually said, “Deficits don’t matter.”

Now, that 10% of the country is unemployed and another 15% are underemployed these right wingers are again interested in deficit reduction without any regard as to what the effects of reducing the national budget would do to those unemployed and those left clinging to a job that in all likelihood may go away if the budget is reduced. I’ve said it before and I’ll say it again, “being a deficit hawk when the country is in financial peril is akin to being a water conservationist while your house is on fire.”

No…our national priority list needs to look like our personal priority list. First put the unemployed back to work and once we have full employment start looking for ways to repay debt. And, don’t just look at reductions in spending. We need to look at additional revenue where is makes sense. Here’s just one example. Hedge fund managers’ income is taxed in the same bracket as capital gains at about half of what ordinary income is taxed by a worker earning $60,000. Hedge fund managers should be taxed at least at the same rate as average workers. Why should their earnings be taxed at half the rate of the average worker? They don’t produce anything.

We also need to look at reducing expenditures where it makes sense. Patronage projects need to be reviewed project by project to see if we should continue. The Pentagon has cited several expenditures that aren’t justified. Several projects only exist because they are being preserved by some shameless congressman or senator. We can’t take an ax to the budget; however we surely can take some nail clippers. Remember the nineties didn’t require draconian cuts, just good management. But, the real engine to fiscal security is in full employment. That’s what our focus should be on. Once we have solid employment we can manage our spending without damaging our economy.