I must say, it’s very disappointing to hear Mark Warner repeat the Republican line that the only way to jump start our economy is to reduce the long-term, structural deficit. In fact, the correct answer from a macroeconomics point of view is that the long-term structural deficit has basically nothing to do with the current unemployment situation. That’s why fixing the long-term structural deficit, while essential in its own right, isn’t the answer to the current unemployment situation.
To be clear, I strongly believe we need to deal with our long-term structural deficit. However, we need to remember what the causes are of that problem. Start with the fact that we had a surplus when George W. Bush took office. That was wiped out by a combination of massive tax cuts (cost: $4 trillion a decade), two wars that were not paid for (cost: probably into the trillions when it’s all said and done), a nasty economic recession caused in large part by Republican deregulatory policies on Wall Street, and the recovery measures taken to try and save us from Great Depression Part Deux. Add in an aging population, the highest health care costs in the world, and the lowest federal taxes since 1950, and there you have it. Yet I don’t hear Mark Warner or the “Gang of
Six Five” pushing to repeal the Bush tax cuts, etc.
That’s a major problem in and of itself. Now, Warner’s compounding that problem by pretending that a solution to the long-term structural deficit will somehow reduce the current unemployment rate. Maybe I missed that in graduate level economics, but I’m sure politicians know better. Heh, and if you believe that one… 🙂