As Washington begins to re-float the idea of another “stimulus,” USA Todayadvises: “Don’t just stand there – do nothing.”
As the economic recovery falters, pressure is mounting on policymakers to do something —anything — to boost growth, preferably before Election Day.
In response to this clamor for another short-term stimulus, here’s one piece of advice: Don’t just stand there — do nothing. More government borrowing and spending would accomplish little but provide lawmakers yet another rationale for delaying the day of reckoning.
But for now, with depression off the table and about 30% of the $814 billion stimulus still in the pipeline, it’s time for government to start following the lead of its people and businesses. Instead of passing a minor stimulus that would be almost meaningless in the context of global economic trends, Washington should focus on the big picture. The national debt stands at $13.4 trillion, or $104,000 for every U.S. household. And even that is just a prelude to the horrific numbers projected over the next two decades as the result of surging expenditures on health care and retirement.
Acting to slow the growth in benefit programs such as Social Security and Medicare would not only forestall economic Armageddon down the road, it also might actually be the best thing for the economy now. It would restore confidence among investors that the nation is not heading for a major credit crisis or a period of hyperinflation.
August was another bleak month for the country’s employment situation. This morning, the Bureau of Labor Statistics announced the unemployment rate was 9.6 percent last month, up from 9.5 percent in July.
There was some good news in today’s release: the private sector added 67,000 jobs, including 27,000 jobs in the construction industry and 8,000 jobs in the mining industry.
However, the number of people now unemployed stands at 14.9 million. Of those, 6.9 million have been unemployed for over 27 weeks.
Since May, the jobless rate remained in the range of 9.5 to 9.7 percent. If one thing is clear, it’s this: Washington needs a new approach to economic policy.
“They say the recession is good for people because fewer people drive to work which means fewer deaths in auto accidents. Fewer people can afford to eat, so we don’t gain enough weight. You know what that means? President Obama’s economic plan is also his healthcare plan. It’s genius!” – Jay Leno
Here’s a look at some of this week’s most interesting, and consequential, budget- and economy-related issues in the 50 states:
The Virginian Pilot reported last week that for 12 years, a government employee in Norfolk, VA drew pay and benefits without a day on the job.
Late last week, the Denver Post called for a balanced budget amendment, saying “reckless spending by both parties has left Americans with an unsustainable $13 trillion federal debt, which is still getting “rapidly worse.’”
Jim Kelly argues in the Pittsburgh Post Gazette that we need to cut more than just defense spending. “We’re in a fiscal emergency. We have to watch what we spend even on vitally important things. So the question isn’t why cut defense spending? It’s why cut only defense spending?”
In an editorial, the Pittsburgh Post Gazette laments the sad state of the economy and the inability of lawmakers to generate solutions. “A worrisome part of the problem is the government doesn’t seem to know what to do to end the suffering.”
The Cincinnati Enquirer reported that the increase in federal funds received by Ohio in 2009 outpaced the national average. Across the country, federal domestic spending increased 16%. Ohio saw a 19% increase in federal dollars compared to 2008.
According to the New York Times, state tax revenues increased 2.2% in the second quarter of 2010. “The greatest year-over-year growth in percentage terms was in Alaska, where revenues shot up 106.3 percent.”
Today’s USA Today reports on the summer’s dismal hiring lapse in large metro areas, and points to business’ uncertainty about the future as a key culprit.
The unemployment rate rose in nearly half of the nation’s 372 largest metro areas in July, as the pace of hiring slowed from earlier this year.
Hiring has slowed nationwide, as businesses are increasingly unwilling to add workers, even as their profits and cash piles grow. Many economists say business executives are holding back until there is more clarity about the economic outlook.
The economy is barely growing and economists worry it won’t expand fast enough to bring down the 9.5% national unemployment rate. On Friday, the government is expected to say that private employers added only 41,000 jobs in August, down from 71,000 the previous month.
Note: Be sure to check back tomorrow morning for our quick breakdown of the Bureau of Labor Statistic’s monthly jobs report.
A mark up is a meeting a committee holds in order to review and discuss a piece of legislation. Members of the committee may propose changes to a bill by offering amendments. Each change is voted on individually. Once all of the changes are either incorporated or denied, the bill is voted on by the full committee. If the bill is passed it will go to the full chamber for a vote.
In more sobering economic news, Automatic Data Processing, Inc. (ADP), a large payroll company, reported that the private-sector cut 10,000 jobs last month. Economists had forecasted that the report would show an increase of 17,000. The report underscores the continued difficulties smaller businesses are having in the current economic climate; while large businesses, those with 500 employees or more, added 1,000 jobs, medium and small businesses shed a combined 11,000 jobs.
Note: The ADP survey includes only private-sector jobs. The Bureau of Labor Statistics unemployment report includes government workers and will be released on Friday.
The Wall Street Journalreported yesterday that at least six lawmakers are under investigation for misusing taxpayer money intended for overseas travel expenses (Congressional rules allow members of the House and Senate to receive daily allowances for meals, cabs and other official travel-related expenses).
The House Ethics Committee is looking into whether some of these funds were instead used to purchase gifts, or pay for spouses’ travel.
According to The Journal, the amount allotted can “add up to more than $1,000 a trip for longer visits to expensive regions.” But as it is common for lawmakers’ “meals and expenses [to be] picked up by other people, such as foreign government officials or U.S. ambassadors…That can leave lawmakers with leftover money [which they] routinely keep or spend on gifts, shopping or to cover their spouses’ travel expenses, according to dozens of current and former lawmakers.”
While several Members have been questioned by Ethics — including Reps. Robert Aderholt (R-AL), G.K. Butterfield (D-NC), Alcee Hastings (D-FL), Solomon Ortiz (D-TX), Joe Wilson (R-SC), and former Rep. Mark Souder (R-IN) — some staff are questioning whether the alleged misuse of taxpayer dollars really warrants an investigation, According to The Journal, aspokeswoman for one of the Members said: “Focusing on personal purchases under $2 while over 14 million Americans are out of work does not reflect the priorities of the American people.”
We agree that Congress should be concentrating on our greatest economic and fiscal challenges. And it is important to note, as did The Journal, that there is currently “no system for lawmakers to return excess travel funds when they return to the U.S.”
But if Washington is unwilling even to control its spending on the small things ($2 bucks!!), how are American taxpayers supposed to trust them to tackle the country’s nearly $13.4 trillion debt?
Rep. Jeb Hensarling, who was first elected in 2002, sits on the House Budget and Financial Services committees.
Like many of his Commission colleagues, Rep. Hensarling has argued Social Security must be on the table when considering how to solve the country’s long-term debt problems. He told MSNBC’s Chris Matthews in February the system would have to be “reengineered” for Americans under age 55.
Rep. Hensarling is author of the Family Budget Protection Act, a bill dedicated to reforming the budget process. The bill would impose spending caps, set “expiration dates” for all new programs passed by Congress (which would require Congress to vote to extend spending – and thus to review a program’s effectiveness), and eliminate baseline budgeting (estimating spending increases for future years).
Rep. Hensarling is probably best known for his vote against the Troubled Asset Relief Program (TARP – the 2008 Wall Street bailout plan) and for his exchange on the debt and deficit with President Barack Obama last January.
According to Rasmussen, 47% of likely voters say they are more worried government will do “too much” in reacting to the nation’s economic problems; 44% are more worried government will do too little.
According to Ipsos/Reuters, 49% off Americans would prefer to extend all the 2001 and 2003 tax cuts; 31% would only extend the tax cuts for people earning less than $200,000; and 15% would allow all of the tax cuts to expire.
According to Rasmussen, 38% of likely voters say last year’s stimulus helped the economy. 36% now say it hurt the economy. 21% say it had no impact.
