For the Virtual Green Room: June 1, 2011
The Employment Picture: Time to PANIC!!

Washington D.C. Is on a Different Planet from the United States of America

Robert Reich:

On Another Planet: Under normal circumstances, this would be the time for the federal government to take bold action... exempting the first $20,000 of earnings from payroll taxes... lend[ing] money to state and local governments... a new Work Projects Administration... to put the long-term unemployed to work on public projects.... amend the bankruptcy law... giving homeowners more leverage.... But these are not normal circumstances....

Cynics might suspect Republicans of quietly hoping the economy stays rotten up until election day. Democrats, meanwhile, are behaving as if they are powerless to affect the economy, even though a Democrat occupies the White House and his appointees run the federal government. They would rather not dwell on the slowdown because they do not want to spook the bond market or add to the prevailing gloom.... Democrats are staking their electoral hopes on continuing disarray among Republican presidential aspirants, as well as the Republicans’ suicidal plan to turn Medicare, the popular health insurance system for seniors, into vouchers that would funnel money to private, for-profit insurance companies.

The result is as if Washington were on another planet from the rest of the country....

Washington’s paralysis in the face of a stalled recovery is bad news – not just for average Americans but for the world. Ironically, it also worsens America’s future budget crisis because it postpones the day when the debt begins to shrink as a proportion of GDP. Yet as the 2012 campaign season looms, the prospects for sensible policy seem to decrease by the day.