This piece is cross-posted from the WashingtonPost.com, where Katrina vanden Heuvel writes a weekly column.
In the face of this Great Recession, the Senate’s recently passed $15 billion jobs bill is more like a sick joke than a serious legislative initiative.
We have lost more than 8.4 million jobs since December 2007. One out of five Americans is now unemployed or underemployed. More than six people are seeking jobs for every one that’s available. In low-income communities the jobless rates are not those of a recession but of another depression, and the Economic Policy Institute estimates that child poverty will rise to 27 percent overall, and to over 50 percent for African American children, in the next year or two.
As economist Lawrence Mishel, president of EPI, told me, "In the midst of the worst jobs crisis in over 70 years, passing a $15 billion bill — comprising mostly of a tax credit of questionable efficacy — is like trying to extinguish a 10-alarm fire with a leaky garden hose."
In contrast, bold plans that match the scale of the crisis aren’t getting enough attention. For example, EPI calls for: a one-year extension of unemployment compensation and COBRA health benefits; fiscal relief for states that will otherwise lay off more teachers, firefighters, police officers and other workers; a New Deal-like public service employment program; investments in transportation and school modernization; and a carefully crafted job-creation tax credit. It would cost $400 billion in the first year to create 4.6 million jobs, and the entire cost could be recouped within 10 years by enacting a financial transactions tax. Also, in a recent cover story in The Nation, economist Robert Pollin laid out an ambitious yet realistic plan to create 18 million jobs over the next three years through leveraging private-public partnerships.
But don’t expect any of this to have an easy time in Congress, where the deficit hysteria now sweeping the political and pundit class constrains the possibility for bold public policy.
A recent New York Times headline screams, "Huge Deficits May Alter U.S. Politics and Global Power." The Wall Street Journal offers this grim warning: "Deficit Balloons into National-Security Threat." The Washington Post describes "a budget hole that is driving accumulated debt to dangerous levels." Behind these sorts of warnings are many of the people who were so fixated on deficits that they missed the housing and credit bubble — not to mention the Wall Street chicanery that made them possible. Now they are peddling the idea that we risk a major debt crisis if government spending continues to fill the gap left by the decline of private-sector demand and investment.