How about that "jobs and growth" plan from
the $350 billion in tax cuts that President
Bush proposed and Congress signed?
This is more than an academic question. The
jobless rate in June rose to 6.4 percent,
or about 9.4 million workers, versus 6.1 percent,
or 9 million workers, in May, the Labor Department
Significantly, the administration had forecast
the creation of 1.4 million new jobs by year-end
2004 after its most recent tax cut became
law. Against that backdrop, 913,000 workers
joined the ranks of the unemployed between
March and June, according to the Labor Department.
It also noted: "In June, there were 2.0 million
unemployed persons who had been looking for
work for 27 weeks or longer, an increase of
410,000 over the year. They represented 21.4
percent of the total unemployed, up from 18.8
percent a year earlier."
Corporate America has been shedding workers
in part to reduce its high ratio of debt to
income accumulated during the 1990s. Corporations
are bringing their high debt loads of the
past decade closer into balance with current
income with a vengeance.
Many examples of this trend can be seen in
the airline, dot-com and telecom industries.
This process is, in turn, weakening household
spending, also at debt's door from a decade
of buying based on borrowing.
large-scale layoffs in the public sector are
casting ominous shadows over the American
workforce, increasingly female and nonwhite.
Spending cuts by state and local governments
swimming in red ink don't typically spur private-sector
employers to spend on new workers.
In fact, such a contraction harms small firms
more than large ones. The latter have more
capital, and can survive business downturns
longer than smaller companies.
The Bush administration's response to the
budget crises being faced by local and state
governments has been to cut taxes for the
corporations and the rich for the third time.
This policy, plus increased military spending
to invade and occupy Iraq, has partly helped
to shift the federal budget from surplus to
Federal deficit spending can be a useful policy.
Uncle Sam can build daycare centers, hospitals
and schools that the American people need.
This is especially the case when private-sector
spending is slowing down relative to its income.
As Martin Wolf wrote on July 2 in The Financial
Times, the borrowing binge that the U.S. went
on in the 1990s won't happen again this decade.
During such post-bubble times, government
spending for non-military purposes can take
up the slack in the economy. Uncle Sam can,
as in the past, prime the pump when recession
and stagnation arrive.
But such Keynesian stimulus to address the
"soft patch" in the market is not on the radar
screen of the Bush White House. It is, for
now, focused on continuing the economic restructuring
of the nation, couched in the vocabulary of
a fiscal policy to create jobs.
Accordingly, working life is becoming more
precarious for millions of people in America.
Just ask them.
Seth Sandronsky is a member of Peace Action
and co-editor of Because People Matter, a
progressive newspaper in Sacramento, Calif.
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