It occurs to me that there are at least three (maybe more) guiding themes in our national economic debate.
One is that the
deficit that will begin to strain us in fifteen years or so, is
more important than any other problem facing our economy today. And that in
order to avoid fixing it by raising taxes on all of us (to, say, pay
for increases in health care costs), the only way we can address it is by putting a huge burden on certain
target groups (the poor, the elderly, the sick and US infrastructure).
That’s not true, of course, and nearly every economist who studies the
subject could tell you that. On the one hand, no one denies that the deficit has grown
dramatically in recent years (mainly due to tax cuts and wars of the early
2000s, and the recession of 2008) and should be addressed, but addressing it now,
during a “jobs recession” (7-8% unemployment), is damaging, irresponsible
nonsense. I’m sure that there are a few economists around the country who would
disagree with that, but they are nowhere close to a majority. When there aren’t enough jobs to go around,
cutting even more jobs and incomes, is foolish. It is the last thing you want
to do to fix the problem.
The second is the related belief that the best way to get our people back
working again is by cutting funding on programs for old people, poor people and
sick people and physical infrastructure. This belief says that if we cut spending
for the health care, income, retirement, or jobs, for a large percentage of our
population, then we’ll (eventually) be okay. Instead of solving our deficit
problem by spreading around the pain just a little bit on all of us (read: tax
increase), we should pick certain target groups (read: old, sick, and poor) and
have them carry the load for us.
This, too, is wrong. You can see that objectively by looking at how slow
our recovery has been in the last four years. In spite of the fact that the
private sector has begun to claw back, the economy over all has still been
sluggish because of the huge numbers of people fired or cut back by state and
local governments. Their cut backs have taken large numbers of people out of
the market. Those people are not buying things and that keeps the economy from
growing.
And look at the draconian austerity programs in Europe. The wealthy
countries have forced such deep cuts on the poor countries that unemployment
has exploded, causing tax revenue to collapse, such that instead of lowering
the deficit through lower expenditures, they have actually increased the deficit
because of fewer number of tax payers. If you use cut backs to lower the
deficit, you usually have to make at least three rounds of cuts to get the
spending down below income. When you make massive layoffs, you lower your
expenditures, but you also lower the number of job holders who pay the taxes
that pay down the deficit. So the deficit goes up, even though your out-go has
gone down. You have to make three or four slashes of jobs and livelihoods and
families in order to have the shrunken, dysfunctional government that can be
balanced by cutbacks only. Again, look at Greece or the repeated rounds of cuts
to jobs, salaries and pensions in our state and local governments to see this
in action.
The problem in a recession is too few jobs. People are out of work, so
they don’t pay income taxes and they don’t buy things, so they don’t pay sales
taxes. And that drives up the deficit because their tax money is not going into
the government and the government is paying out in food stamps, unemployment,
etc. When people are out of work and not buying, then the merchants are not
making anything and they don’t restock or hire new people. So, it “trickles”
down to the plants and farmers. The only entity large enough to put people to
work is the government, so it needs to step in and do some spending and hiring
and put people back to work as a stimulus to the merchants, plants and farms. Once
they start seeing more cash in their pockets, they’ll spend more, and the
merchants will hire more workers and buy more from the wholesalers, etc. Until
finally the economy can manage on its own. This is not rocket science.
Trying to make big federal cuts in the budget deficit right now would
throw the economy back into a recession, which will enlarge, not shrink, the
deficit, just as it has done in Greece and Italy, and just as it did in the
American state and local governments. Firing people lowers demand and lowers
government income from taxes, which drags on the economy.
The third guiding concept is that “Supply-side” economics, the theory
that if you give more and more tax cuts and benefits to large corporations and
wealthy individuals, it will eventually “trickle down” to the average worker,
because the wealthy and corporations are America’s “Job Creators.” I think that
on this theory, the percentage of economists who would agree with this notion
would slide down to almost zero. You can see some now and then being
interviewed on Fox News, but in the real world, they are extremely rare.
Large corporations are simply not the major engines of growth for jobs.
Corporations hire people when the streets are filled with people with money in
their pockets who are demanding their products. The idea that a corporation
would hire thousands of new workers in the middle of a job recession, in the
hopes that people would buy their items even before they have incomes, is not
just illogical, it can also be proven wrong easily by the research.
Historically corporations only hire when the economy is on the upswing.
Companies do not create jobs on the
hopes that the economy might get better
by their doing it.
Now, this is not to say that some new companies are not starting up.
There are a lot of entrepreneurs out there who have an idea for a niche that
has not yet been filled. But (a) they are not the giant corporations that many
in congress have worked so hard to create tax breaks for, and (b) they often
survive because they found a niche market that no one has yet gotten into. They
are not a giant corporation that just decides to hire people in the belief that
unemployed people will buy their product.
If more people have jobs, they will pay taxes and buy things and
merchants can stay afloat and stock supplies and buy from wholesalers, and
manufacturers will take on new people to meet the demand, who will in turn go
out and buy things etc., and the economy will start to get back on its feet. An
economy grows from demand, not supply. You can “supply” all the goods in the
world to the market, but if there are no “demand” (partly because the
government has fired workers and cut pensions and salaries), then the economy
is not going to recover.
Finally, with so much of our national wealth being held in the hands of
so few, there is less to go around for the “real” economy down on the ground.
That’s not precisely true, because money is fungible and can be created, but for
the last thirty years, such a huge amount of money has been sucked up into such
a very few number of hands, that the end result has actually been not enough
money to go around to fund jobs. Too many people needing incomes, but not
enough money to fund them. Too few dollars being chased by too many job
seekers.
One thing that needs to be done is to return the tax cuts to the levels
they were before the Bush administration. It’s hard to believe this, because
it’s seldom reported, but there are a good number of very conservative
economists (Alan Greenspan, David Stockman, etc.) who now argue that the tax
cuts were a mistake and we need to revoke them. All of them.
Second, we need to create a nation-wide jobs program to get America
back to work and stimulate the economy, paid for by the money that we will now
have from the return of tax income.
Which is to say, we should be doing exactly the opposite of what we are
now doing, which is cutting spending and cutting taxes. Or to put it another
way, what we are doing is cutting growth and cutting income. Or, to borrow an
over worked, over blown phrase, we have declared a “war on” growth for America.
millions Latin Americans into the United States. What
causes people to uproot themselves from their histories and homelands and take
a long, painful, costly, and dangerous journey into a foreign land where they
seldom know the language and are often greeted with hostility? 
We will explore this question by visiting and experiencing the southern
Mexican state of Oaxaca, where many of the forces for migration are stark and
clear. The good news is that Oaxaca is a beautiful state of 2 million people and
you will fall in love with the people, the land, and their history. The bad
news is that nearly half of the Oaxacan population has left the state going
north, seeking food for their families. Why is it that each year many people—both
men and women—leave Oaxaca and travel to the United States? 
For
more information or to apply please contact: 
