Fighting for a U.S. federal budget that prioritizes peace, economic security and shared prosperity
These days, it’s fashionable for any candidate for federal office to talk about how quickly he’ll reduce the budget deficit, which totaled around $1.1 trillion in fiscal 2012. And you’re going to hear talk about the Simpson-Bowles deficit reduction plan and more like it in the coming debates. But immediate deep deficit reduction will reverse the economic recovery, and that fact is left out of election rhetoric. Think of it this way: If you woke up tomorrow and learned that Washington had solved the deficit crisis and you’d lost your job, would you celebrate? Of course not. And yet, any move to immediately reduce the deficit does increase the likelihood that you will lose your job.
flickr/ Barack Obama
When the government cuts spending, it lays off workers and cancels orders for all sorts of goods and services that would generate income for companies in the private sector. Those companies, in turn, lay off workers, and the negative effects ripple through the economy. The nonpartisan Congressional Research Service predicted in a September report, for example, that any significant spending cuts in the near-term would contribute to an economic contraction. In other words, slashing deficits right now will send us ever deeper into the Great Recession from which we’ve scarcely emerged.
Champions of immediate deficit reduction are likely to point out that unsustainable deficits aren’t good for the economy. And that’s true - in the long run. Washington must indeed plan for smaller deficits in the future. And that will be a lot easier to accomplish when the economy is healthier, since government spending declines when fewer people qualify for assistance, and tax revenues expand when the jobless go back to work. The necessity of near-term recovery spending paired with long-term deficit reduction gets drowned out when candidates pack punchy slogans into flashes of primetime TV.
This originally appeared as part of a piece on TomDispatch.com.