by Dr. Boyce Watkins
We’ve all been hearing about this horrible thing called a “fiscal cliff” that President Obama and Congress are seeking to avert. The cliff sounds scary, as if the entire economy is going to jump into the ocean, catching fire on the way to implosion. The “fiscal cliff” is a series of spending cuts and tax increases set to go into effect if Congress cannot reach a budget deal by January.
Rev. Jesse Jackson, in a column for the Chicago Sun-Times, feels that the cliff is a contrived and artificial pseudo-crisis, designed to scare the American public into supporting spending cuts that will harm those who are most vulnerable. Rev. Jackson feels that the crisis is fake primarily because it was the decision of Congress to implement the trip switch in the first place.
Consider the current debate in Washington. The city is in full uproar about the so-called “fiscal cliff,” the deep cuts in spending and hikes in taxes scheduled to take place at the end of the year. To listen to this debate, you would think the end of the world will come if Congress and the president don’t reach an agreement to cut Medicare and possibly Social Security and increase taxes over the next 10 years to avoid going over the cliff.
Rev. Jackson says that the American people should not “fall for the hype.” He refers to the cliff as an “austerity bomb” that pushes for extortion by getting political leaders to do things they would not otherwise do.
The fiscal cliff is not a product of nature. It is rather a dangerously foolish austerity bomb created by Congress in the debt-ceiling negotiations 18 months ago. Essentially, Congress is threatening to blow up the economy unless Congress agrees not to blow up the economy. The threat is used to extort agreements that would otherwise simply be unacceptable — such as cutting Medicare and Social Security, the basic pillars of family security.
Rev. Jackson also argues that deficit problems are not as serious as some would expect. He mentions that deficits are down as a percentage of the economy by 25 percent since the start of the recession in 2009. He also makes the point that sustained economic growth will be slowed if the austerity measures and spending cuts are put into effect. Finally, Jackson notes that while the fiscal cliff makes reference to America as a whole enduring economic troubles, most Americans have already gone off the cliff.
While everyone is in hysteria about phantoms, the real horrors are ignored. Record numbers of Americans have already gone over the cliff with no help in sight. More than 20 million people are in need of full-time work, and Washington is focused on cutting deficits, not creating jobs. Poverty is at near-record levels and inequality at new extremes, and Washington is talking about cutting programs for the vulnerable. Racial and gender inequity still throws hurdles in front of a majority of the country, but isn’t on the agenda. Violence still haunts our streets, but receives no attention.
Poverty costs in dreams crushed, hopes stunted, lives lost. It costs more to live in poverty. Food is more expensive, transportation is harder, illness is unaffordable. The loss of a job, the theft of a paycheck, the illness of a child can sink a family struggling to stay afloat.
Poverty, violence, and racial and gender inequities also cost the country big-time. We won’t put up with mass starvation. The unemployed collect food stamps; the employed pay taxes. This country will pay big-time for a generation raised in poverty on mean streets.
Jackson advocates for a massive jobs plan that will put Americans back to work. He also says that such a plan should be directed toward urban areas that have not recovered from the recent recession. Corporations and white Americans have experienced a full economic recovery: Stock markets saw dramatic increases shortly after the recession began, largely due to massive capital injections by the federal government. Also, white Americans are enjoying unemployment rates as low as 7 percent. At the same time, African American unemployment remains at the remarkably high rate of 14.3 percent, largely due to a lack of willingness by federal officials to provide necessary financing to bolster this segment of the economy.
As a finance professor, I can tell you this: Rev. Jackson is correct, for the most part. While it is debatable that our nation’s deficits and debt levels are problematic (I think they are), the reality is that we must invest in the American people in order to find our way to economic recovery. By only investing in certain industries or racial segments of the population, we are leaving millions of Americans behind. Ronald Reagan showed us that trickle down economics simply does not work, whether the wealth is being trickled from massive corporations or from white Americans who control most of the capital and then are expected to hire black folks.
A jobs program would be a great start toward allowing our nation’s economic healing to spread to everyone and not just the chosen few. Also, President Obama’s desire to tax the rich is right on point, since our democracy is threatened when the wealthy are allowed to hoard so much of our nation’s resources. While Obama is only seeking tax increases of two or three percent, we actually need much more than that to confront a national debt level that will leave our country in economic ruin within the next 15 – 20 years.
The president and Congress should listen to Rev. Jackson on this matter. Both he and Dr. Julianne Malveaux should be invited to the White House, particularly when the economic survival of American cities is discussed. They have the expertise to understand such delicate matters and the conversations must be of substance, not symbolism. Too many people are suffering for us to do anything other than that.