Jobs and Growth, Not Austerity

The U.S. economy, once in free-fall toward a new depression, has begun to recover. But we are still mired in a prolonged slump marked by mass unemployment, rising poverty, and declining wages. And the fragile recovery is threatened by obsessive concern with cutting deficits that has infected both parties.

As even Federal Reserve Chairman Ben Bernanke recognizes, it is long-term unemployment, not excessive deficits or debt, that is now inflicting the greatest human toll and economic damage. Polls show that voters agree joblessness and a bad economy are much higher priorities than deficits.

Yet too many in Washington are fixated on cutting public spending to balance the budget, not on how to put people back to work and get our economy going. There is no theory of economics that explains how we can deflate our way to recovery. Businesses are not basing investment decisions on how much Congress cuts the debt in 2023.

As Great Britain, Ireland, Spain and Greece have shown, inflicting austerity on a weak economy leads to deeper recession, rising unemployment and increasing misery.

In a deep recession, deficit reduction is a moving target. If you cut spending and consumer purchasing power in an already depressed economy, unemployment rises and revenues fall — and the goal of a smaller deficit keeps receding like a mirage in a desert. When private purchasing power is depressed by the aftermath of a financial collapse, only public investment can make up the gap.

The budget hawks have the sequence backwards. Public outlay for jobs and recovery come first, growth is restored, and revenues follow. Budget cuts in a deep slump lead only to a deeper slump.

The government should invest in areas vital to our economy — to repair crumbling infrastructure, to build 21st-century smart-grid, public transportation and renewable energy systems, and to create public and private sector jobs. We should also help states prevent layoffs of teachers and other public servants, make early care and higher education more affordable, and create public service jobs throughout the nation. It can do so by borrowing at record low interest rates. We can also stimulate recovery without increasing deficits by increasing taxes on the wealthy and pumping the proceeds directly into the economy.

Both bipartisan and conservative deficit reduction plans — Simpson-Bowles, Rivlin-Domenici, and the Republican budget — magically assume a recovery to "normal" levels of employment. Yet, the economy is nowhere near normal growth, and budget cutting will only retard growth. At the end of the year, we face a congressionally-created "fiscal cliff," with automatic "sequestration" spending cuts everyone agrees should be stopped to prevent a double-dip recession. That threat has led to backroom negotiations, backed by a multimillion dollar public relations campaign, toward a "grand bargain" that would maintain tax give-aways for the rich; cut Social Security, Medicare, and Medicaid; and impose new, job-killing spending cuts. This is no bargain, and it should be rejected.

President Obama should be commended for proposing a new jobs program. But unless the balance of power in Congress changes dramatically, there is a serious danger that after the election the austerity lobby will prevail.

We need jobs first. With recovery, deficit reduction will come of its own accord thanks to increased revenues in an improving economy. That was the case in the three decades after World War II — when the debt to GDP ratio declined from over 120 percent of GDP in 1945 to under 30 percent by 1978.

In 1945, our leaders placed a priority on putting people to work, not cutting spending. So government doubled down with public investments like the GI bill, housing, and highways — and widespread collective bargaining and equal opportunity laws made sure the rewards of growth were widely shared. 

Today, we need the same scale of public investments that made sure the greatest generation and their children enjoyed growth, opportunity, and shared prosperity.

In the face of today's weak economy, the Federal Reserve has vowed to sustain extraordinary measures until unemployment comes down and the economy picks up. But as Chairman Ben Bernanke observed, very low interest rates alone cannot fix this economy. To make sure the American people are not crippled by another lost decade of joblessness, we need presidential leadership — and congressional action — to spur jobs and growth, not dangerous austerity.

The views set forth above are endorsed and supported by the following economists: 

Gail Blattenberger, University of Utah

Robert Blecker, American University

Carrie Boden, Arlington Independent School District, AISD

Ted Boettner, West Virginia Center on Budget and Policy

Peter Bohmer, The Evergreen State College

James Boland, International Union of Bricklayers and Allied Craftworkers, IUBA

James Booker, Siena College

Robert Borosage, Institute for America's Future

Howard Botwinick, The State University of New York Cortland

Roger Even Bove, West Chester University (Retired)

James Boyce, University of Massachusetts, Amherst

Gerard Bradley, New Mexico Voices for Children

Elissa Braunstein, Colorado State University

Doug Brown, Democratic Socialists of America

Bruce Brunton, James Madison University

Robert Buchele, Smith College

Howard Bunsis, American Association of University Professors, AAUP

Mary Byrne, Salem State University

Marianne Callahan, Internation Association For Feminist Economics

Martha Campbell, The State University of New York, Potsdam

Jim Campen, University of Massachusetts, Boston

Timothy Canova, Nova Southeastern University Shepard Broad Law Center

Jim Carpenter, Milwaukee Area Technical College

Raymond Castro, New Jersey Policy Perspective

John Dennis Chasse, United University Professions

Jim Campen, University of Massachusetts, Boston (Emeritus Prof of Econ)

Howard Chernick, Hunter College, City Univ. of NY

Joan Costa Font, London School of Economics and Political Science (LSE)

Jim Crotty, University of Massachusetts, Amherst

Paul Christensen, Hofstra University (retired)

Kimberly Christensen, Sarah Lawrence College

Jens Christiansen, Mount Holyoke College

Nathaniel Cline, University of Redlands

David Cohen, Department for Professional Employees, AFL-CIO

Jennifer Cohen, Whitman College

Oliver Cooke, Richard Stockton College of New Jersey

Jane D'Arista, Political Economy Research Institute, UMass, Amherst

Flavia Dantas, The State University of New York, Cortland

Paul Davidson, Journal of Post Keynesian Economics

Charles Davis, Indiana University

Susan Davis, Buffalo State College

Gregory DeFreitas, Hofstra University

Amitava Dutt, University of Notre Dame

James Devine, Loyola Marymount University

Ranjit Dighe, State University of New York at Oswego

Michael Dover, Cleveland State University School of Social Work

Laura Dresser, Center on Wisconsin Strategy-University of Wisconsin, COWS-UW Ma

Nata Duvvury, National University of Ireland, Galway/ IAFFE

Peter Earl, University of Queensland, Australia

Todd Easton, University of Portland

Ross Eisenbrey, Economic Policy Institute

Justin Elardo, Portland Community College

Gerald Epstein, University of Massachusetts, Amherst

John Evans, Trade Union Advisory Committee to the OECD

Lawrence Grossberg, UNC Chapel Hill

Christopher Gunn, Hobart and William Smith Colleges

Robin Hahnel, Portland State University, Department of Economics

Catherine Lynde, University of Massachusetts, Boston

Carroll Estes, Institute for Health and Aging, University of CA, San Francisco

Jeff Faux, Economic Policy Institute

Steven Fazzari, Washington University in St. Louis

Rabbi Michael Feinberg, Greater New York Labor-Religion Coalition

Marshall Feldman, The University of Rhode Island

Thomas Ferguson, Roosevelt Institute

Rudy Fichtenbaum, Wright State University

David Fields, University of Utah

Deborah Figart, The Richard Stockton College of New Jersey

Kade Finnoff, University of Massachusetts, Boston

Richard Flacks, University of California, Santa Barbara

Samuel Flint, Indiana University Northwest

Maria Floro, American University

Frederick Floss, Buffalo State College

John Foran, University of California, Santa Barbara

Catherine Forman, Southern Connecticut State University

Max FraadWolff, The New School Graduate Program in International Affairs

John Gallup, Portland State University

Angel Garcia Banchs, Central University of Venezuela; Econometrica

Heidi Garrett-Peltier, Political Economy Research Institute

Paul Garver, International Union of Foodworkers (retired)

Robert Scott Gassler, Vesalius College

David George, LaSalle University

Teresa Ghilarducci, Schwartz Chair in Economic Policy Analysis, The New School

G. Reza Ghorashi, Stockton College

Don Goldstein, Allegheny College

Stephen Gorin, Plymouth State University

Ulla Grapard, Colgate University

Daphne Greenwood, Colorado Center for Policy Studies and Dept of Economics, UCCS

Jo Marie Griesgraber, New Rules for Global Finance

Stephany Griffith-Jones, Initiative for Policy Dialogue-Columbia University

Lawrence Grossberg, University of North Carolina Chapel Hill

Joe Guggenheim, Economist

Hazel Dayton Gunn, Union for Radical Political Economics, URPE

Sanjiv Gupta, Dept of Sociology, Univ of Mass-Amherst

Robert Guttmann, Hofstra University

Jacob Hacker, Yale University

Robin Hahnel, Portland State University, Department of Economics

Douglas Hall, Economic Policy Institute

John Battaile Hall, Portland State University

Mark Hamilton, Milwaukee Area Technical College

John and Debby Hanrahan, DC Statehood Green Party

Geoffrey Harcourt, School of Economics, University of New South Wales

Heidi Hartmann, Institute for Women's Policy Research

John Harvey, Texas Christian University

Sue Headlee, American University

James Heintz, University of Massachusetts, Amherst

Conrad Herold, Hofstra University

Roger Hickey, Institute for America's Future

Leo Hindery Jr., US Economy/Smart Globalization Initiative

Peter Ho, University of Denver

Joan Hoffman, John Jay College of Criminal Justice

Emily Hoffman, Western Michigan University

Barbara Hopkins, Wright State University

Kenneth Houghton, Independent Consultant

Mohamed El-Hodiri, University of Kansas

Julio Huato, St. Francis College

Heather Hurwitz, University of California Santa Barbara

Dorene Isenberg, University of Redlands

Richard Jackman, London School of Economics

Sanford Jacoby, UCLA

Arjun Jayadev, University of Massachusetts Boston

Robert Johnson, Institute for New Economic Thinking

Joel Johnson, Maine Center for Economic Policy

Stacey Jones, Seattle University

\Avis Jones-DeWeever, Ph.D., National Council of Negro Women

Helene Jorgensen, Independent Economist

Pramod Junankar, University of New South Wales, Australia

Arne Kalleberg, University of North Carolina

J K Kapler, University of Massachusetts, Boston

Jeffrey Keefe, Rutgers University

Soohaeng Kim, SungKongHoe University

Mary King, Portland State University

Eric Kingson, Syracuse University

Richard Kirsch, Roosevelt Institute

Timothy Koechlin, Vassar College

Andrew Kohen, Emeritus Professor of Economics, James Madison University

Robert Kuttner, American Prospect

Supriya Lahiri, University of Massachusetts Lowell

Melaku Lakew, Richard Stockton College of New Jersey

John Langmore, University of Melbourne

Richard Layard, London School of Economics and Political Science

Joelle Leclaire, Buffalo State College, SUNY

Thea Lee, Deputy Chief of Staff of the AFL-CIO

Robert Leighninger, Living New Deal Project

Keith Leitich, Pierce College, Puyallup

Hank Leland, SEIU

Margaret Levenstein, University of Michigan

Charles Levenstein, University of Massachusetts, Lowell

Henry Levin, Teachers College, Columbia University

Marc Levine, University of Wisconsin, Milwaukee

Mark Levinson, Service Employees International Union (SEIU)

David Liebschutz, Siena College

Michael Lipton, Sussex University (Research Professor of Economics)

Paul Lockard, Black Hawk College

Thomas L Power, University of Montana

Robert Lynch, Washington College

Arthur MacEwan, University of Massachusetts Boston

Jeff Madrick, Rediscovering Government

Mark Maier, Glendale College

Jean Maier, Sierra Club

Arindam Mandal, Siena College

Cheryl Maranto, Marquette University

Ann Markusen, University of Minnesota

Daniel Marschall, George Washington University

William Mass, Unviersity of Massachusetts, Lowell

Julie Ann Matthaei, Wellesley College

Peter Matthews, Middlebury College

Anne Mayhew, University of Tennessee (Retired), Economist

Richard McIntyre, University of Rhode Island

Hannah McKinney, Kalamazoo College

Walter McMahon, University of Illinois, Retired

Michael Meeropol, John Jay College Of Criminal Justice, CUNY

John Messier, University of Maine Farmington

William Milberg, New School for Social Research

Marcus Miller, University of Warwick

John Miller, Ehaton College

Jonathan Millman, University of Massachusetts, Boston

Jeff Mills, University of Cincinnati

Lawrence Mishel, Economic Policy Institute

Gary Mongiovi, St John's University

Manuel F Montes, South Centre

Leslie Moody, Partnership for Working Families

Monique Morrissey, Economic Policy Institute

Fred Moseley, Mount Holyoke College

Philip Moss, University of Massachusetts, Lowell

Tracy Mott, Department of Economics, University of Denver

Jamee Moudud, Sarah Lawrence College

Kevin Murphy, Oakland University

Marta Murray-Close, University of Massachusetts Amherst

Michele Naples, The College of New Jersey

Julie Nelson, University of Massachusetts Boston

Reynold Nesiba, Augustana College

Anne Nolan, Attorney, and Labor and Living Wage Activist

Michael Nuwer, The State University of New York Potsdam

Phillip O'Hara, Global Political Economy Research Unit (GPERU)

Paulette Olson, Wright State University

Nancy Ortiz, Social Security Administration

Pierre Ostiguy, Bard College

Kimberly Otis, Center for Partnership Studies

Christine Owens, National Employment Law Project

Aaron Pacitti, Siena College

Spencer Pack, Connecticut College

Thomas Palley, AFL-CIO

Jairo Parada, Universidad del Norte

Richard Parker, Harvard University

James Parrott, Fiscal Policy Institute

Nelly-Eleni Pavlidou, Aristotle University of Thessaloniki, Greece

Jose Pereira, Universidad de Santiago

Kenneth Peres, Communications Workers of America AFL-CIO

Karen Pfeifer, Smith College emerita

Robert Plotnick, University of Washington

Karen Rosel Polenske, MIT

Robert Pollack, Boston University

Robert Pollin, U. Mass and Political Economy Research Institute

Marilyn Power, Sarah Lawrence College

Mark Price, Keystone Research Center

Ashley Provencher, Siena College

Edith Rasell, United Church of Christ

Robert Reich, U.C. Berkeley

Michael Reich, University of California, Berkeley

Cordelia Reimers, Hunter College, CUNY

Stephen Reynolds, Department of Economics, University of Utah

Max Richtman, National Committee to Preserve Social Secuirty and Medicare

Malcolm Robinson, Thomas More College

John Roche, St John Fisher College, Rochester NY

Charles Rock, Rollins College, Economics Department

James Rock, University of Utah

Maya Rockeymoore, Global Policy Solutions

John Roemer, Yale University

Sergio Romero, Boise State University

Stephen Rose, Georgetown University

Nancy Rose, California State University, San Bernardino

Gina Rosen, University of California, Los Angeles

Michael Rosen, Milwaukee Area Technical College

Joshua Rosenbloom, University of Kansas

Marguerite Rosenthal, National Jobs for All Coalition

Sergio Rossi, University of Fribourg, Switzerland

Benjamin Russak, UCLA - Master's Student in Urban Planning

Steve Savner, Center for Community Change

Larry Sawers, American University

Tyler Saxon, Colorado State University

Ronald Schettkat, Schumpeter School, University of Wuppertal

Ted Schmidt, SUNY Buffalo State

John Schmitt, Center for Economic and Policy Research

Markus Schneider, University of Denver

Juliet B Schor, Boston College

Elliott Sclar, Earth Institute - Columbia University

Jean Shackelford, Bucknell University (emerita)

Sumitra Shah, St. John's University (retired)

Anwar Shaikh, New School for Social Research

Nina Shapiro, Saint Peter's University

Hilary Shelton, NAACP

Heidi Shierholz, Economic Policy Institute

Richard Shirey, Siena College

Nicholas Shunda, University of Redlands

Laurence Shute, California State Polytechnic University, Pomona

Dr. Kalim Siddiqui, University of Huddersfield

Damon Silvers, AFL-CIO

Curtis Skinner, National Center for Children in Poverty

Peter Skott, University of Massachusetts

Bryan Snyder, Bentley University

Luz Sosa, AFT-Local 212

Roberta Spalter-Roth, American Sociological Association

Peter Spiegler, University of Massachusetts-Boston

Stephen Spitz, Progressive Democrats of America, PDA

Case Sprenkle, University of Illinois Econ. Prof. Emeritus

William Spriggs, AFL-CIO

J. R. Stanfield, Professor Emeritus, Colorado State U.

K C Stanfield, DePauw University

Howard Stein, The University of Chicago (emeritus)

Seguino Stephanie, University of Vermont

Mary Stevenson, University of Massachusetts Boston

James Stewart, Penn State University

Diana Strassmann, Rice University

Frank Stricker, California Faculty Association, CFA

Myra Strober, Stanford University

David Taylor, Internactional Brotherhood of Electrical Workers

Lance Taylor, New School for Social Research

Peter Taylor-Gooby, University of Kent

Peter Temin, MIT

David Terkla, University of Massachusetts Boston

Frank Thompson, University of Michigan

Alexander Thompson, Vassar College

Chris Tilly, University of California, Los Angeles

Joseph Ricciardi, Babson College

Bruce Roberts, University of Southern Maine

Richard Sims, National Education Association

Gerard Toal, Virginia Tech

Jim Tober, Marlboro College

Donald Tomaskovic-Devey, University of Massachusetts, Amherst

Charles Tontar, Merrimack College

Mayo Toruño, California State University San Bernardino

John Tower, Retired from Oakland University

Amy Traub, Demos

Scott Trees, Siena College

Dale Tussing, Syracuse University

Chethan Udayashankar, Capital University Law School

Leanne Ussher, Queens College, CUNY

David Vail, Bowdoin College

William Van Lear, Belmont Abbey College

Bryan Van Namen, Demandside Economics

Rick Vanderploeg, University of Oxford

Tara Veazey, Montana Budget and Policy Center

Roberto Veneziani, Queen Mary University of London

Matias Vernengo, University of Utah

Matt Vidal, King's College London

Valerie Voorheis, University of Massachusetts, Amherst; Marlboro College

Paula Voos, Rutgers University

Don Waldman, Colgate University

Robert Waldmann, University of Rome in Tor Vergata

Robert Watt, University of Birmingham

John Weeks, Professor Emeritus, University of London

David Weiman, Barnard College

Scott A. Weir, Wake Technical Community College

Thomas Weisskopf, University of Michigan

Robin Wells, Roosevelt Institute

Rayack Wendy, Wesleyan University

Russell Williams, Wheaton College

John Willoughby, Department of Economics, American Univefrsity

Justin Wolfers, University of Michigan

Rick Wicks, Economics Dept., Göteborgs Universitet, Sweden

Marty Wolfson, University of Notre Dame

Brenda Wyss, Wheaton College, MA

Jacqui Yeagle, Alaska Center for Public Policy

Linda Wilcox Young, Southern Oregon University

Norman Waitzman, University of Utah

Richard Wertheimer, Child Trends (retired)

James Winkler, United Methodist General Board of Church and Society

Jon Wisman, American University

June Zaccone, National Jobs for All Coalition

Ajit Zacharias, Levy Economics Institute of Bard College

David Zalewski, Providence College

James M. Zelenski, Regis University

Ben Zipperer, University of Massachusetts, Amherst

Marcia Zuckerman, Boston Workmen's Circle