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Why is Washington Obsessing About the Deficit and Not Jobs and Wages?
It was the centerpiece of the Presidents reelection campaign. Every time Republicans complained about trillion-dollar deficits, he and other Democrats would talk jobs.
Thats what Americans care about jobs with good wages.
And thats part of why Obama and the Democrats were victorious on Election Day.
It seems forever ago, but its worth recalling that President Obama won reelection by more than 4 million votes, a million more than George W. Bush when he was reelected and an electoral college majority of 332 to Romneys 206, again larger than Bushs electoral majority over Kerry in 2004 (286 to 251).The Democratic caucus in the Senate now has 55 members (up from 53 before Election Day), and Republicans have 8 fewer seats in the House than before.
So why, exactly, is Washington back to obsessing about budget deficits? Why is almost all the news coming out of our nations capital about whether the Democrats or Republicans have the best plan to reduce the budget deficit? Why are we back to showdowns over the deficit?
It makes no sense economically. Cutting the budget deficit either by reducing public spending or raising taxes on the middle class, or both will slow the economy and increase unemployment. Thats why the so-called fiscal cliff is so dangerous.
In the foreseeable future our government has to spend more rather than less. Businesses wont hire because they still dont have enough consumers to justify additional hires. So to get jobs back at the rate and scale needed, government has to be the spender of last resort.
The job situation is still horrendous. Twenty-three million Americans cant find full-time work. Less than 59 percent of the working-age population of the nation is employed, almost the lowest percent in three decades. 4.8 million Americans have been out of work for more than six months. The 40-week average spell of joblessness is almost three times the post-1948 average.
And even those who have jobs are finding it harder to make ends meet. Jobs created since the trough of the recession pay less than jobs that were lost. The median wage is 8 percent below what it was in 2000, adjusted for inflation. And wages are still heading downward: Average hourly earnings in October were 3.1 percent below what they were in October, 2010.
This isnt just an ongoing tragedy for 23 million Americans and their families. It also robs all of us of what these people would produce if they were fully employed roughly $2 trillion worth of goods and services that wont be created this year.
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