Robert Borosage writes a warning about when bipartisan elites come to a consensus on solving the “problem”.
Today’s elite consensus — that deficits are at crisis levels, that budgets must be brought into balance immediately — is equally wrong-headed. It slights the real crisis we face, and is foreign to the spirit that made America great.
What is the crisis we face today? We have an economy scarred by mass unemployment, falling wages, and growing insecurity. In the downturn, a staggering 40 percent of American households have been afflicted by unemployment, negative home equity (“under water homes” worth less than their mortgages), mortgage payment arrears, or foreclosure. In November 2008, one quarter of Americans aged 50-59 reported that they’d lost more than 35 percent of their retirement savings.
But this devastation caused by the collapse of the financial bubble and resulting recession is but the foul expression of an economy that has suffered long-term decline. We were hemorrhaging manufacturing jobs when the economy was growing before the bubble burst. Wages fell for most Americans over the course of the last decade, which suffered the worst job creation of any period since the end of World War II. The imbalances were obscene before the recession, with finance capturing 40 percent of corporate profits, the wealthiest 1 percent capturing half of the benefits of economic growth, the US running soaring trade deficits, even in high technology products, with China and the world. Our decaying infrastructure, broken health care system, declining educational performance in relation to the industrial world all preceded the fall.
So if we now turn to balancing our budget and succeed, what then? We will have had a brutal fight that will turn us one against another without addressing the fundamental challenges facing the country.
The right question we need to ask, I would argue, is what is the new strategy, the new foundation for an economy that offers hope for rebuilding America’s economic vitality in the competitive global market place? This requires a clear and bold strategy for revitalizing American manufacturing. It requires investments in areas vital to our future — in modern infrastructure, in education and training, in research and innovation. We need to capture a lead in the green industrial revolution that is sweeping the world. It requires new trade strategy, shackles on financial speculation, empowering workers to capture a fair share of the productivity and profits they help generate to help rebuild America’s middle class. We have to figure out how to afford this, financing what we can, changing priorities and raising revenues where needed. But this is a far different question than just how we get our books in order.