Stop the Austerity Train Wreck!

ows revolutionsThe biggest question right now on Planet Washington is whether the congressional supercommittee will reach an agreement.

That’s the wrong question. Agreement or not, Washington is  on the road to making budget cuts that will slow the economy, increase unemployment, and impose additional hardship on millions of Americans.  

The real question is how to stop this austerity train wreck, and substitute the following:

  • FIRST: no cuts before jobs are back – until unemployment is down to 5 percent. Until then, the economy needs a boost, not a cut. Consumers – whose spending is 70 percent of the economy – don’t have the money to boost the economy on their own. Their pay is dropping and they’re losing jobs.

  • SECOND: Make the boost big enough. 14 million Americans are out of work, and 10 million are working part time who need full-time jobs. The President’s proposed jobs program is a start but it’s tiny relative to what needs to be done. It would create fewer than 2 million jobs. We need a big jobs program – rebuilding America’s crumbling infrastructure, and including a WPA and Civilian Conservation Corps.
  • THIRD: To pay for this, raise taxes on the super-rich. It’s only fair. Never before has so much income and wealth been concentrated at the very top, and taxes on the top so low. Go back to the 70 percent marginal tax we had before 1980. And include more tax brackets at the top. It doesn’t make sense that any income over $375,000 is taxed at the same 35 percent, even if it’s a billion dollars. And tax all sources of income at the same rate, including capital gains.
  • robert reichFOURTH: Cut the budget where the real bloat is. Military spending and corporate welfare. End weapons systems that don’t work and stop wars we shouldn’t be fighting to begin with, and we save over $300 billion a year. Cut corporate welfare – subsidies and special tax breaks going to big agribusiness, big oil, big pharma, and big insurance – and we save another $100 billion.

Do you hear me, Washington? Do these four things and restore jobs and prosperity. Fail to do these, and you’ll make things much, much worse.

Robert Reich
Robert Reich’s Blog 

Photo: Marika Shaub



  1. Joe Weinstein says

    Reich is correct again.

    Commenter Pigdog should quit raving until he explains how his proposed cutting of foodstamps – unless accompanied by massive affirmative govt and societal action for population control – is going to result in much other than malnourishment (and maybe starvation, disease or death) for extra millions of kids and other folk.

    Commenter Ryder complains that a government-created job inevitably costs more than a privately created job, and then goes on to suggest massive government-creation of jobs anyhow, via military draft.

    Actually, this suggestion accords with Reich’s (and my) basic perspective: what’s important now is to get those jobs created, whether at least-possible cost (if we had all the time in the world) or at greater cost (which is OK because we DON’T have all the time in the world).

    And commenter Dusty’s concern could be met if we ensure that people now in uniform, or drafted into it, are in fact used in (or transited to) civilian jobs. In the past government has created many on-balance useful civilian jobs, so it can be done again.

  2. pigdog67 says

    Robert masssive cuts are needed. These cuts would break the Fascist Corpratocracy of Walmart and the Military Industrial complex. First get rid of Food Stamps completely. This will break Walmart as Walmart will not have subsidized workers anymore. Many workers at Walmart need food stamps to survive and Walmart gets food stampers as customers. Without the existence of food stamps Walmart will have to pay living wages.
    Mom and Pop businesses will then reappear.
    Secondly make US military expenditures be based on its share of world GDP. Since America now has 17% of world GDP it should only have 17 percent of world miltiary expenditures. It currently has over 50% of world military expenditures.
    Thirdly force China to float their currency.
    That is all that is needed. Neither party will do these things. Even the Republicans are not against food stamps as they know these underpin the military industrial complex. The children of food stampers are eager to serve in the Military as they see as it as another government ticket out of starvation. And they are accustomed to being on welfare. The military is patriotic welfare and no one can criticize this welfare. As the economist von Mises said ‘people respond to price signals’. It does not matter is they are statist or private.
    It is a beautifully designed system all fitting together in an evil way. If you had asked an American in 1890 if America could ever become the Statist system it is today he would have laughed at you….
    America is beyond anything even Chairman Mao could have imagined. 45 million people on food stamps. 1 in 6 people in America. Bizarre…

  3. Ryder says

    It’s simple fact that government “created” jobs cost far, far more than jobs that arise out of the private sector…

    Which means for the same wealth expended, far more jobs are produced in “the real world”, while government inefficiently forces jobs into existence using brute force…

    We could have zero unemployment if we just drafted all of the unemployed into the Army… and this would fit in to Bob’s formula perfectly…

  4. dusty says

    While in general I agree with Dr. Reich on not causing more unemployment I would have to point out that if we substantially cut the military budget then it would be necessary to muster out a lot of troops who will join the unemployed. If we quit acting out our American Exceptional-ism imperial adventure then we will not need anywhere near the number of troops that we now have scattered across the globe. It would be wrong and wasteful to warehouse troops that are no longer needed for offensive actions against other nations.

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