We need a fix-the-economy commission

Conversely, some – but not all – conservative groups probably will take exactly the opposite stances that USAction does.

Unfortunately, no one seems to be challenging the overall frame behind the commission’s work. The commission is basing its work on the premise that our federal debt and deficit represent the fundamental problem our nation faces. That premise is fundamentally wrong.

The biggest problem we face today is the broken economy. It would take creating 300,000 jobs each and every month for five years for us to get back to the unemployment rate we had before the Great Recession began. If we leave the economy to its own devices, this will not happen. It is impossible.

In addition, we now have the greatest redistribution of wealth and income to the rich and to corporations that we have seen in the past 100 years. It is impossible to sustain a healthy, vibrant economy for the vast majority if this redistribution is not reversed.

And we have a hypertrophied financial sector, incentivizing speculation over productive investments, promoting long-term household indebtedness; and concentrating more and more wealth in the hands of fewer and fewer people. Our economic growth is driven by asset inflation and not productivity. The virtuous cycle of rising productivity, rising wages and rising profits is gone – and with it, the American Dream.

We need to get the dream back – and when we do this, we’ll address our debt and deficit problem. There are several things we must do.

First, we must fix the economy. The private sector can’t create the job growth we need. We need substantive public investments – and we need to continue stimulative programs like unemployment insurance for the millions of jobless Americans.

Next, we must come to the rescue of a federal budget that has been bruised and battered by two wars that we haven’t paid for and by the Bush tax cuts of 2001 and 2003. Make permanent the tax cut for middle-income workers – but end it for the wealthiest two percent of Americans.

Finally, if the deficit commission’s co-chairs were really serious about finding the funds to put our federal government on a firm financial footing and free up revenues for public investments to grow the economy, they would have looked for ways to tap into the vastly under-taxed wealth trapped in the financial sector by recommending innovations such as a financial transaction tax that alone would raise $1.5 trillion over ten years.

The point here is that we need a different commission. For all its work, we didn’t need a deficit commission. We needed a lets-fix-the-economy commission. 

We still do.

Alan Charney is director of strategy and policy for USAction.

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