The Republican minority in the United States Senate is determined to impose severe fiscal austerity on the country, at a time when doing so is certain to create more drastic hardship and push the economy back into another deep recession.
On the irrational grounds that it's time to pull the plug on efforts to stimulate economic growth, citing mysteriously invisible "market fears" of a non-existent "debt crisis" in the U.S., Senate Republicans have succeeded in blocking extended unemployment insurance, COBRA health insurance subsidies for unemployed workers, and fiscal aid to cash-starved states. In doing so, they have begun implementing by default the kinds of austerity measures the IMF has notoriously imposed on less-developed nations, and which countries like Germany and England are now pursuing at the expense of their own prospects for economic growth.
catchlightning's diary :: ::
Never mind that it was Republican pseudo-economics and incompetence that led to the housing bust, the financial crisis and the Great Recession. Never mind that Republicans were, as a result, roundly and soundly defeated in the two most recent federal elections. With 41 votes in the Senate, Republicans can block any measure using the filibuster threat. And that's what they've done with extended unemployment insurance.
As a result, an estimated 1 million long-term jobless workers have stopped receiving any unemployment compensation since Congress failed to extend the programs before Memorial Day. And they are joined by another 40,000 long-term unemployed every day.
Also at risk are continued funding for employment assistance for needy low-income families, aid to states to help with Medicaid payments, support for food stamp benefits and aid for local schools, police and firefighters. Despite the urgent need, it appears that the administration's proposed $50 billion in fiscal aid to states and municipalities is stalled.
Employment numbers recently have been bolstered by temporary federal Census hiring. But, starting this month, many of the more than half-million Census workers will begin seeing those jobs end. With unemployment already persistently near 10 percent, hundreds of thousands of federal, state and local workers including many public school teachers will likely swell the ranks of the unemployed thanks to the Republican austerity hounds.
Nearly a month ago I wrote that we had reached 'A Dangerous Crossroads':
Ominous signs emerged last week that a threat to undermine an economic recovery is afoot, and that threat has particularly severe consequences for America’s 15 million unemployed.
Before voting on an already scaled-down jobs and jobless aid bill, House Democrats succumbed to pressure from conservative Blue Dogs and nervous moderates and weakened the bill further, eliminating some of its core provisions.
This is the worst possible time to start dismantling the fiscal pylons that have thus far stabilized the economy and allowed for the beginnings of a recovery. As Christina Romer, chair of the President’s Council of Economic Advisors, has reminded us — think 1937. In response to a policy pivot that emphasized short-term deficit reduction and lower spending, the still-weak economy headed back into a second severe recession.
That the short-term deficit argument was, temporarily, accepted then is understandable. After 1932, under the New Deal, unemployment had been steadily declining for four straight years and GDP growth had been averaging 9 percent annually. That is far from the case today. Recent GDP growth of about 3 percent is less than half that needed for sustained recovery. And unemployment has not shown any sustained, measurable decline. To the contrary, we’ve had 15 million unemployed each month for nearly a full year.
In 'Pseudo-Economics Become Sado-Economics' we warned that, without actually deciding to do so, Congress had begun to:
...reduce or eliminate portions of the unemployment safety net. Tens of millions of Americans are already sliding from the middle-class into poverty. The phony deficit hawks are doing the Republicans’ bidding. If the economy slides backward, they will blame the Democrats and attack even more jobless aid programs. I fear that, feeling their mean-spirited oats, they will soon target the added Tiers of emergency federal unemployment benefits.
In his column today in The New York Times, titled "The Third Depression", Nobel Prize-winning economist Paul Krugman writes:
http://www.dailykos.com/storyonly/2010/6/29/880038/-Republicans-Imposing-Sado-Economic-Austerity-on-U.S.
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