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7$/'#0&+ :'1,'/((;
!"##$ -- lLs offlclal: ueep cuLs ln federal spendlng are under
way, $83 bllllon over Lhe nexL seven monLhs. 1he quesLlon we
should all be asklng soon ls: Where are Lhe [obs?
1he reason glven by 8epubllcans and conservaLlves for Lhe
urgenL need Lo drasLlcally reduce federal spendlng was LhaL
mounLlng federal debL and blg governmenL was sLlfllng
prlvaLe lnvesLmenL and economlc ouLpuL. now, we wlll see
wheLher LhaL [usLlflcaLlon for Lhe spendlng cuLs was facL or flg
1he LruLh ls LhaL Lhe reducLlons ln spendlng LhaL wlll Lake place over Lhe nexL year wlll, aL a
mlnlmum, have no poslLlve lmpacL on Lhe economy. ln Lhe worsL case, Lhe cuLs could lead Lo
lncreased unemploymenL and slower, lf noL negaLlve, economlc growLh. ln facL, many experLs
esLlmaLe Lhe cuLs are mosL llkely Lo cosL [obs: more Lhan 700,000 accordlng Lo Macroeconomlc
Advlsers LLC.
ln no case are Lhe recenLly enacLed sequesLer cuLs llkely Lo sLlmulaLe [ob creaLlon and lncreased
economlc growLh.
1here wlll, however, be a good deal of measurable and lmmedlaLe paln for mllllons of Amerlcan
households dlrecLly affecLed by Lhe cuLs. Many of Lhem wlll be famllles LhaL have been LeeLerlng
on Lhe flnanclal edge slnce Lhe beglnnlng of Lhe recesslon, and many more wlll be Lhose who
have fallen permanenLly lnLo "barely geLLlng by" sLaLus.
Already, even Lhe modesL recovery LhaL ls under way ls noL equally shared. As Lhe uow lasL week
plerced Lhe 14,000 level Lo fllrL wlLh an all-Llme hlgh, fourLh quarLer CuÞ for 2012 was reporLed
Lo have lncreased aL an annual raLe of a mere 0.1°. AlLhough LhaL esLlmaLe could be revlsed
upward ln Lhe monLhs ahead, Lhe facL remalns LhaL wealLhy lnvesLors are largely lmmune Lo Lhe
paln belng experlenced by a ma[or share of Lhe u.S. populaLlon.
Accordlng Lo unlverslLy of Callfornla,
8erkeley professor Lmmanuel Saez, fully
93° of Lhe lncrease ln LoLal u.S. famlly
lncome ln 2010, Lhe flrsL full year of
recovery, wenL Lo Lhe Lop 1°. Þubllc pollcles
such as sLlmulaLlve lederal 8eserve acLlons
LhaL are helplng Lo lnflaLe Lhe sLock markeL,
and Lax cuLs for Lhe wealLhy, have comblned
Lo creaLe a level of economlc lnequallLy noL
seen ln Lhe unlLed SLaLes slnce Lhe CreaL
lurLher, accordlng Lo uean Makl, chlef
unlLed SLaLes economlsL aL 8arclays,
corporaLe earnlngs have rlsen aL an
annuallzed raLe of 20° slnce Lhe end of
2008, whlle household dlsposable lncome
has barely moved, averaglng an lnflaLlon-
ad[usLed 1.4° annually over Lhe same
1he recenLly enacLed sequesLraLlon cuLs wlll
furLher fuel Lhe dlsparlLy beLween corporaLe
Amerlca, Lhe wealLhy and mlddle class, and
Lhe poor.
1he LruLh ls LhaL Lhere ls no debL crlsls LhaL
was necessary Lo address wlLh Lhese cuLs. As
our economy grows and people geL back Lo
work, Lhe debL and deflclL wlll naLurally decrease wlLh a rlslng Lax base, lncreaslng consumer
spendlng and Lhe publlc lnvesLmenL LhaL comes wlLh greaLer revenue and lmproved consumer
confldence and buslness senLlmenL. 1he mosL effecLlve way Lo promoLe LhaL resulL, parLlcularly
now, glven Lhe economy's currenL slow growLh Lra[ecLory, ls Lo lnvesL sLraLeglcally ln Lhe
economy ln a manner LhaL wlll provlde Lhe lncenLlves for new prlvaLe lnvesLmenL, buslness
growLh and ulLlmaLely [ob creaLlon.
ÞresldenL Cbama has repeaLedly dlscussed Lhe need Lo lnvesL ln Lhe naLlon's lnfrasLrucLure.
Much of our lnfrasLrucLure ls aglng and ln dlre need of repalr or replacemenL. lnvesLlng ln
lnfrasLrucLure could enhance markeL efflclencles, promoLe green [obs, lmprove Lhe envlronmenL
and provlde needed employmenL opporLunlLles ln urban and rural communlLles, as well as on
naLlve Amerlcan 1rlbal Lands.
lnfrasLrucLure lnvesLmenLs could lnclude brldge and hlghway consLrucLlon and repalr, new
commuLer and hlgh-speed rall llnes, upgradlng communlcaLlons sysLems, renovaLlng or bulldlng
new schools, communlLy colleges and sLaLe-of-Lhe arL [ob Lralnlng faclllLles, lnvesLlng ln dams,
waLerways and waLer LreaLmenL faclllLles, reclalmlng key weLlands, and lmprovlng Lhe baslc
llvablllLy of lmpoverlshed nelghborhoods.
lor sure, large and growlng federal deflclLs are a leglLlmaLe concern. 8uL wlLh 12 mllllon workers
searchlng for [obs, mllllons more worklng parL-Llme buL wanLlng full-Llme employmenL wlLh flaL
or falllng wages, nearly 13 mllllon famllles owlng more on Lhelr homes Lhan Lhey are worLh, wlLh
a nearly 40° drop ln neL worLh for Lhe average Amerlcan famlly, and CuÞ barely ln poslLlve
LerrlLory, Lhe economy ls ln need of a [ump sLarL, noL a cuLback.
Þulllng back on federal spendlng now ls equlvalenL Lo an unemployed worker refuslng Lo go on
[ob lnLervlews ln order Lo save on gas or bus fare.
Slnce Lhe laLLer parL of 2012, WashlngLon pollcymakers have been flxaLed on federal budgeL
reducLlon. ?eL none of Lhose conversaLlons have led, nor are llkely Lo lead, Lo Lhe creaLlon of a
slngle [ob. 1he Amerlcan publlc deserves beLLer.
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