This country is at a crossroads.
If we fail to understand the need to invest in people and our future—now and in the months, perhaps years, ahead—the already weak recovery will unravel. But with deficit hawks in both parties dominating the debate in Congress, abetted by a lazy media drumbeat, the chances that this country will become a stronger and healthier one don’t look very good. Do those playing strong-arm politics with the deficit understand the damage they are inflicting right now and on generations to come?
For lower-income people, unemployment numbers rival those of the Great Depression. And the average unemployed person has now been searching for work for over eight months—the highest average on record. Despite such widespread hardship, the Senate has failed to extend unemployment benefits. As a result, as many as 1.2 million workers will be cut off of unemployment benefits by the end of this week, and at least 140,000 workers will lose healthcare benefits. The Senate and House also failed to approve $24 billion in promised federal assistance to state Medicaid programs—even as states face $260 billion in budget shortfalls over the next two years. The Center on Budget and Policy Priorities estimates that without federal help state cuts could result in the loss of 900,000 jobs.
The stark fact is this: if the government doesn’t play an active and smart role in stimulating the economy right now—if it surrenders to those fixated on the deficit who seemingly have learned nothing from our economic history—then we will likely head into a double-dip recession. As New York Times columnist Paul Krugman recently observed about the deficit hawks blocking needed investments, "The odds of a prolonged slump are rising by the day.”