Webster’s defines a “reason” as an explanation or justification of an act and an “excuse” as a plea or explanation offered in defense of one’s conduct; apology. Many pundits are predicting that the Republicans will gain seats in the upcoming mid-term elections in both the House and the Senate. Some are even predicting that the House will return to a Republican majority. Are voters projected to vote Republican for good reason, or just as an excuse? Will the Republicans be rewarded by the voters for constantly saying NO and would this act be justified, or as an apology for the way things went in the 2008 elections?
Recent data released by the Bureau of Labor Statistics indicates unemployment still at an inordinately high level of 9.6% with numbers over 17% when including despondent and marginally attached workers (1). Stimulus monies are beginning to run out, and a new rounds of job losses are poised and waiting in the wings. The Republicans say that they are all about balancing the budget now while providing very little information on just where they intend to cut spending, but one would have to surmise that extending stimulus monies would not be on their to do list. Every loss of a dollar spent by the government will cost another job somewhere. By all accounts, the Republicans appear ready to undertake the same fiscal policies that extended the Great Depression. All for the sake of protecting our children’s children while millions of today’s children suffer in abject poverty.
When reason prevails, comfort in different attitudes towards the deficit and government spending can float to the top:
1) The government can borrow money at very attractive rates when compared to the average citizen. With ten year Treasury notes selling at below a 1.5% yield (2), the risk of borrowing at this rate is small as compared to the economic damage of losing millions of consumers because of failing to extend unemployment insurance benefits for the long term unemployed. Adding a Tier V for the 99ers would add a much needed boost to the consumer markets while helping people in great need, a win-win by any standards. Despite the current deficit, the world still views us as a very safe place to lend money, and we should take advantage of it to provide continued benefits for the unemployed.
2) Republicans favor extending the tax cuts for the richest 3% of American taxpayers at a projected cost of approximately 70 billion dollars a year in lost tax revenues that could be used to stop some of the hemorrhaging in the deficit. This is enough to fund most of the projected costs of providing a Tier V and extending unemployment benefits.
3) The tax policies mentioned in item 2 above have been in place through the entire recession. Tax cuts for the rich have done nothing to generate new jobs and America’s corporations are sitting on the highest cash reserves in history.
4) Paying down the deficit will be much easier if 17% of American’s that are unemployed, or under-employed, can get back to work full-time and start paying taxes again.
One is left to ask the question, if the rich, and the Republicans, are were willing to do next to nothing except to say “No” in the past, why would a reasonable person expect them to change course and be supportive after the mid-term elections? As much as one can not “spend” their way out of this recession, one cannot “save” their way out of it either. Those with the money, that refuse to put it to good use, run the risk of having some of it taken away to support the public good and to breathe life into the words in the Preamble that state “promote the general Welfare.” Based on the positions put forth by the Republican Party going into the mid-term elections, it is hard not to conclude that a vote for the Republican’s equals a vote for a continued recession and perhaps a 2’ND Great Depression. Cast your vote wisely, but do for a reason, and not as an excuse!
(1) Tier V Unemployment Benefits Extension and Why Needed – An In Depth Analysis of Latest Jobs Report Link to article here
(2) Daily Treasury Real Long-Term Rates