Austerity economics is bad policy and politics

The presidential election is receding in the rear view mirror, but its lessons should stay with us. Just weeks ago, both sides agreed that the race would be won by the candidate who convinced voters that he would do a better job for the middle class and achieve growth and opportunity for all.

President Obama succeeded – overcoming the lingering impact of the Bush recession -- because voters rejected Mitt Romney’s recycled trickle-down policies of tax cuts for the rich and austerity for the rest of us.

Now policymakers are faced with a new round of momentous choices – how to balance the imperative for job creation with the pressure to address budget shortfalls, and how to get anything done in the dysfunctional family that is the U.S. Congress. Too many will be tempted to cut a deal – sometimes called a “Grand Bargain” – to cut benefits for our most important family protection programs and lower tax rates for the rich and corporations, all in the misguided name of fiscal responsibility.

Here’s the big problem if that happens: The whole debate about the deficit is framed around the same austerity economic policies that brought about the recession in the first place. If we go down that path, we could throw this country back into a deep recession.

Not only is austerity bad politics – even Mitt Romney and Paul Ryan had to distance themselves from it – but it’s disastrous economic policy. Austerity economics is responsible for the country’s growing inequality, rising deficits and unemployment. Austerity economics means the wealthy remain unscathed while the people who rely on programs like Medicare, Medicaid and Social Security – the elderly, the disabled, the poor and the young – will get less and pay more. And let’s not forget the impact this will have on future generations.

We cannot continue on the path we’re on. The gap between the wealthiest Americans and everyone else is growing at an unconscionable rate. We can’t keep giving tax breaks to big corporations and the rich and expect the money to trickle down to the middle class.

If we want to turn around this country, we need to reframe the economic debate to focus on long-term growth and shared prosperity, what Professor Jacob Hacker of Yale University refers to as “prosperity economics.”

Prosperity economics is built on the idea that economic policies should support growth that works for everyone, not just the wealthy. We need to invest our money in programs that will actually create good jobs here, not overseas, like rebuilding our crumbling roads, bridges and airports. We need to restore U.S. manufacturing by reforming our trade policies and end all tax incentives for outsourcing.

We also need to ensure security for workers and their families. We can rebuild a healthy economy by reconnecting wages to productivity by protecting the rights of working people to organize and bargain collectively through a union on the job. We can and must safeguard our democracy from corporations with deep pockets, limitless power and hidden agendas. A fair-minded economic approach necessarily puts people first. We need to give states the kind of financial help they are clamoring for to hire back teachers, first responders and other public service workers. We have to give students world-class education and skills, so they can thrive.

We need to favor workers over Wall Street if we want good jobs and rising wages, and we must preserve and strengthen Medicare and Social Security to ensure everyone has access to affordable, quality health care and a dignified and secure retirement.

Last, we need to ensure equal and easy access to the democratic process. Democracy flourishes when we empower citizens, community organizations and unions to ensure that all Americans have an organized and effective voice.

We can’t forget that politics is about people and about families. We need to reframe the political and economic debate so our democracy can again focus on serving its people – all its people.

Trumka is president of the AFL-CIO.

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