America Desperately Needs Stimulus Spending, Not Budget Cutting

How to Make Government Work
Dec. 10 2012 2:47 PM

America Desperately Needs Stimulus Spending, Not Budget Cutting

Unemployed people stand in a line that stretched around the block to enter a job fair.
While 146,000 jobs were created, the employment market remains anemic

Photograph by John Moore/Getty Images.

The jobs report last Friday was confusing, to say the least. Yes, the core unemployment rate fell to 7.7 percent, but a major reason for that was a drop in the size of the workforce—now a mere 63.6 percent of the population, far below what it has been over the past decade. While 146,000 jobs were created, the employment market remains anemic, demand is still low, and median income is still trending flat to down.

All of which raises the question that some continue, properly, to ask: Why the hysteria over the deficit? Shouldn’t we be seeking more stimulus—and a higher deficit? Shouldn’t we be sticking to the macro-policies that brought us out of the trough of 2008-09? Of course we should, especially since the twin fears of stimulus spending—rising interest rates and inflation—are nowhere on the horizon. The White House included a modest $50-billion stimulus in the package it delivered to Speaker Boehner last week. That element of the plan was met with derisive laughter from Republicans. It’s a pity the White House didn’t make a more aggressive argument for the importance of it.


The world has conducted a massive macro-economic experiment since the cataclysm of 2008. In Europe, the fans of austerity have had their chance, and the results have been a disaster. Take a quick look at John Cassidy’s report on British economics in The New Yorker: “It’s Official: Austerity Economics Doesn’t Work.

While the fiscal-cliff showdown looms, let’s not forget the larger crises of the economy: inadequate demand, stagnant wages, and continuing distribution of incremental income primarily to the top 1-2 percent of income earners. One final data point: In a superb Atlantic article about the potential rejuvenation of American manufacturing, Charles Fishman makes the point that new manufacturing jobs are paying about $13.50 an hour. That is better than no jobs at all, but it is not the path to a middle-class resurgence.

Eliot Spitzer, the former governor of the state of New York, hosts Viewpoint on Current TV. Follow @eliotspitzer on Twitter.


Medical Examiner

The Most Terrifying Thing About Ebola 

The disease threatens humanity by preying on humanity.

I Bought the Huge iPhone. I’m Already Thinking of Returning It.

Scotland Is Just the Beginning. Expect More Political Earthquakes in Europe.

Students Aren’t Going to College Football Games as Much Anymore

And schools are getting worried.

Two Damn Good, Very Different Movies About Soldiers Returning From War

The XX Factor

Lifetime Didn’t Think the Steubenville Rape Case Was Dramatic Enough

So they added a little self-immolation.


Blacks Don’t Have a Corporal Punishment Problem

Americans do. But when blacks exhibit the same behaviors as others, it becomes part of a greater black pathology. 

Why a Sketch of Chelsea Manning Is Stirring Up Controversy

How Worried Should Poland, the Baltic States, and Georgia Be About a Russian Invasion?

Trending News Channel
Sept. 19 2014 1:11 PM Watch Flashes of Lightning Created in a Lab  
  News & Politics
Sept. 20 2014 11:13 AM -30-
Business Insider
Sept. 20 2014 6:30 AM The Man Making Bill Gates Richer
Sept. 20 2014 7:27 AM How Do Plants Grow Aboard the International Space Station?
  Double X
The XX Factor
Sept. 19 2014 4:58 PM Steubenville Gets the Lifetime Treatment (And a Cheerleader Erupts Into Flames)
  Slate Plus
Slate Picks
Sept. 19 2014 12:00 PM What Happened at Slate This Week? The Slatest editor tells us to read well-informed skepticism, media criticism, and more.
Brow Beat
Sept. 20 2014 3:21 PM “The More You Know (About Black People)” Uses Very Funny PSAs to Condemn Black Stereotypes
Future Tense
Sept. 19 2014 6:31 PM The One Big Problem With the Enormous New iPhone
  Health & Science
Bad Astronomy
Sept. 20 2014 7:00 AM The Shaggy Sun
Sports Nut
Sept. 18 2014 11:42 AM Grandmaster Clash One of the most amazing feats in chess history just happened, and no one noticed.