published Thursday, September 15th, 2011

New reasons for stimulus

Bad economic news has become a mainstay since the Great Recession dragged the United States -- and most of the industrialized world -- into the ditch in 2008. That doesn't mitigate the troubling findings this week from newly mined 2010 Census data. It does, however, underscore the imperative for Congress to adopt a bona fide jobs program, the sooner the better.

Among the most disheartening Census findings are these: 2.6 million more people in America dropped below the official poverty level last year, marking a 52-year peak in the official tally of our poor, and the highest proportion of the population in poverty (15.1 percent) since 1993. Median household income, adjusted for inflation, also fell back to 1996 levels, wiping out the modest wage gains of the last 15 years and more than confirming economists' stamp of "a lost decade" with regard to wage and income decline.

These depressing numbers confirm that a broad range of Americans, from the poor to the upper-middle class, continue to suffer from the harshest recession and slowest recovery since the Great Depression. They further beg the question of when Washington -- specifically, Congress' anti-action, doom-saying, do-nothing Republicans -- will realize that further short-term economic stimulus and maintenance of a stronger social safety net are absolutely necessary to salve the pain of the economic trough.

The Republican mantra of broad tax cuts for big business and relaxed regulation (of what: toxic pollution? infected meat?) is no remedy for the continuing hardship of a slow recovery. Indeed, big corporations are already awash in record profits and stashed cash -- much of which is parked in overseas tax havens -- yet they are unwilling to spend on higher production and new jobs until consumer spending perks up.

By contrast, mainstream economists estimate that the payroll tax reductions for workers and highly targeted tax cuts and job-creation incentives for small businesses outlined in President Obama's proposed Jobs Act could add from 100,000 to 150,000 jobs a month over the next year. It would also stanch the widening layoffs by state and local governments of teachers, police and first responders, which are placing a further drag on the economy since the three-year 2009 stimulus aid to states expired.

Such improvements would help reverse the drop in consumer confidence that has been deliberately fueled by gloomy Republican distortion, doomsday talk and legislative tactics (i.e., the debt ceiling debacle) in order to scare voters and undermine Obama's administration in next year's elections.

If competent congressional action isn't taken soon, the Brookings Institute now estimates, the Great Recession will end up adding 7.4 million in new poor to the nation's poverty level by 2015 -- bumping the Census Bureau's figure from 46.2 million in 2010 to 53.6 million.

The new Census figure on poverty, the highest since records were kept, is already watered down. When the official poverty level was established in the 1960s, it was pegged at 50 percent of the media household income. Now, it's pegged at 30 percent of the median income, or $22,314 for a family of four.

The median income, though at a 13-year low, would be even lower had it not been distorted upwards by the current higher-than-average concentration of the nation's wealth to the top one percent, which now holds the highest percentage of income and wealth in the past 80 years. In actuality, significantly more Americans have dropped out of the middle class in recent years, while median household income (half are above and half are below) plunged last year to $49,445, vs. its peak in 1999 at $53,252 in 2010 dollars.

These dismal figures will not begin to improve for the vast majority of Americans without a sharp turn by Republicans toward support of short-term economic stimulus, and an increase in the nation's current, historically low tax rates on ultra-wealthy Americans and big corporations.

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conservative said...

You are joining Oblamer in calling for payroll tax cuts. This means you are now advocating "tax cuts for the rich"!This also cuts money for Socialism Security. Are you trying to destroy Socialism Security? Why don't you also advocate a lower corporate tax rate as well? This would make goods purchased by the poor cheaper to buy. Don't you care about poor people?

September 15, 2011 at 7:34 a.m.
BigRidgePatriot said...

The slow recovery and increase in poverty is a consequence of insane government policy and the government misspending of economic resources. Democrats do not have a clue what it takes to create a job. They should all resign and let us get on with the task of rebuilding this country!

September 15, 2011 at 4:17 p.m.
timbo said...

Hey Harry, don't be so lazy. At least write your own stuff instead of getting it directly from the Obama web site.

September 15, 2011 at 4:39 p.m.
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