Last week’s job’s summit focused on the fierce urgency of now. And well it should, with 18 percent unemployment and underemployment. But Obama also seemed to understand how short term needs overlap with long term goals. There’s just one sticking point.
The short term need is obvious: jobs.
The long term needs are also clear: newly rebuilt infrastructure, from high speed rail to classrooms for our kids; designing a new energy economy, from windmills to solar cells; and high quality education so everyone can reach their personal potential and so our workforce has the skills to succeed.
These short term and long term needs solve each other. Billions of dollars of school improvements are “shovel ready.” People can be hired right away to retrofit buildings to improve energy efficiency with added insulation and double-pane glass (hopefully made in America). Even the projects that aren’t shovel ready can get started now. Hire the architects and engineers. Start the environmental impact statement and identify the right of way for the tracks. The future can start immediately. From design to construction, it will create jobs the entire time. The benefits will last for generations.
So what’s the sticking point? Money. It costs money to make money. The deficit hawks suddenly realized that wars and tax cuts cost money. People are turning hysterical about deficits, and willing to go no farther.
Robert Kuttner of The American Prospect attended the summit, and he had the opportunity to ask the President directly about deficits.
“I hope that your administration will recognize, as I know you will, that it’s possible, first of all, to reduce the deficit over time and sometimes in the short run realize that you need to increase the deficit. And I hope the concern about the deficit in the long run doesn’t crowd out the need for additional spending in the short run.
And I also think that some of these programs that increase jobs and increase GDP are probably the fastest way to get the economy back on a track that will reduce the deficit over time. It’s certainly a better way to reduce the deficit than putting ourselves into a — into a debtor’s prison and assume we can deflate our way to recovery.”
The President agreed. He is concerned about deficits in the long run, especially the “structural deficit” from health care. But he recognizes that the way to reduce the deficit is not primarily by cutting costs (with the exception of health care) but by growing the economy.
“Now, if we can’t grow our economy, then it is going to be that much harder for us to reduce the deficit. The single most important thing we could do right now for deficit reduction is to spark strong economic growth, which means that people who’ve got jobs are paying taxes and businesses that are making profits have taxes — are paying taxes. That’s the most important thing we can do.
We understand that in this administration. That’s not always the dialogue that’s going on out there in public and we’re going to have to do a better job of educating the public on that.”
Yes, control the deficit “in the out-years.” But Obama himself said we need to “press the accelerator in terms of job growth” right now. That’s the balance. And that’s the smart way to manage immediate needs and long term deficits.
