Rep. Scott Tipton looks backward to the nation’s economic future
Congressman Scott Tipton wasted no time in jumping on the president for the weak job numbers in May. “There’s a path to job creation and economic recovery in this country, but with the most recent jobs numbers showing an increase in unemployment during May and 40 straight months of unemployment over eight percent … it’s clear that the president is not following it.”
In short, Tipton wants a Republican economy.
The “path” he refers to is the Paul Ryan Budget that would further reduce taxes on the rich, change Medicare as we know it, raise taxes for workers and further shrink the middle class. A continuation of the small-government, free-market economic polices of the Bush administration, the Ryan path leads to the same ditch President George Bush left the country in.
What Tipton and his colleagues fail to appreciate is that we don’t need to elect Mitt Romney to restore the Republican economy. As Nobel Prize winning economist and New York Times columnist Paul Krugman says, “That’s precisely the policy we’ve been following the past couple of years. Never mind the Democrat in the White House, for all practical purposes, this is already the economic policy of Republican dreams.”
Federal tax policy is a holdover from the Bush administration. Republicans pressured Obama into continuing the economically disastrous Bush tax cuts. And with most borrowing obstructed by congressional Republicans, the president has governed under restraints designed to frustrate his efforts to stimulate the economy by spending on infrastructure, education, health care and other economic and socially beneficial programs.
As Krugman asked rhetorically, “Isn’t Obama a big spender? Actually, no; there was a brief period in late 2009 and early 2010 as the stimulus kicked in, but that boost is long behind us. Since then it has been all downhill.”
The extensive layoff of pubic employees, rising higher education costs, reducing benefits for the needy and similar effects reflect shrinking government, not the profligate spending Republicans accuse the president of. While the frugality may be born of necessity — inadequate government income and inability to borrow — the effect is nevertheless decreased government spending.
While the government lacks money to stimulate employment, corporations have plenty, but they are determined not to spend it. As Reuters economist Felix Salmon wrote, “High corporate profits and low levels of job growth are two sides of the same coin. If things were working properly right now, companies would take their excess revenues and use them to hire more people. Instead, they’re basically just letting those excess revenues sit on their balance sheets as cash because they’re scared to invest in themselves. It’s frankly pathetic.”
Krugman and Salmon agree that, because the private sector refuses to spend, government must — even if that means borrowing. As Salmon explains, “The government can borrow at 1.45 percent: It should do so, in vast quantities, and invest that money back into the economy itself. Take a few hundred billion dollars and use it to fix our broken infrastructure, to re-hire all those laid-off teachers and firefighters, to provide some kind of safety net for the millions of Americans who have been out of work for more than a year.”
None of this suggests that the May employment numbers are not bad news for the president and his party. However, the administration points out, jobs have increased steadily for 27 months straight, though at a slower pace than is required to return the nation to a healthy economy. While the May figures are down, they are still positive.
Obama will need to defend his economic record against both just and unjust charges, but he should not limit his responses to defending his policies.
Rather, he should, as Paul Krugman does, call out the Republican economic program for what it is: “a gigantic con game: it depends on convincing voters that the bad economy is the result of big-spending policies that President Obama hasn’t followed (in large part because the GOP wouldn’t let him), and that our woes can be cured by pursuing more of the same policies that have already failed.”
While the economic path forward may be uncertain, there is no turning back. We have already been down that road.