The Economy and the Budget

I didn’t get to listen to Obama’s speech last night, but I will read about it and read the commentaries, but the bottom line is that definitive action is needed.  Action has to happen quickly as the results are not immediately.  One commentator I heard this morning said that any changes now would not make an impact for six months.  So Congress, do something now.

The Republicans seem to have only one primary goal in sight and that is to defeat Obama in 2012.  Newt Gingrich was up front with that in the Wednesday night debate and said that exactly.  What happened to working on solving the problems of this country?

The August 27 issue of the Economist put it pretty plain and clear.

In 2008 the world economy was saved from depression by a bold and co-ordinated plan to shore up banks and counter the slump with fiscal and monetary stimulus.  Today there is no boldness…and no co-ordination.  …a bout of budget-cutting …will only increase the risk of another recession.

Adjusting fiscal policy does not mean simply doling out more stimulus.  The trick is to put in place more reforms now that will improve the public finances over time without slamming too hard on the brakes today.

America is in most need of such a shift.  It has done virtually nothing to deal with its medium term deficit, but on current policy will see the biggest short term tightening of the big rich economies next year.  That would have been a poor choice even in a reasonable recovery.  Given the economy’s weakness, it looks daft.  But it could be fixed. 

The congressional supercommittee … could agree on a bolder package of entitlement cuts and new revenue, while Barack Obama and the Republicans could limit the short term squeeze by extending the temporary payroll tax cut and boosting spending on things like roads and school repairs.

We need some thoughtful action by our “leaders”.  Millions of people are hurting in this country and they need help.  Jobs are needed and retraining is needed for workers.  We are not a manufacturing country anymore.  That problem needs to be addressed. 

We do not need the Republicans to be against everything for the next sixteen months.  They are shirking their responsibilities if they continue to do that.  Compromise is needed on both sides.  We need some true leadership and true problem-solving.

Don’t let our “representatives” play the same old politics.  We are in a serious situation that requires action.  Keep on them until they do their jobs.

Take care.