Rebuild the Economy: Invest in People

The New York Times published my letter below December 26, 2008. Meanwhile, Mother Jones has just published (not yet online) a first class piece by David Cay Johnston, “Fiscal Therapy.” He details how we can rebuild the economy without increasing the deficit by a dime, simply by reversing the great tax and subsidy machine that pumps wealth from the poor and middle class to the rich.

“Louis Uchitelle is absolutely correct that President-elect Barack Obama’s spending plan may fail—or worse, backfire (“Maybe It Can’t: A Trap in Obama’s Spending Plan,” Week in Review, Dec. 21). Spending on infrastructure, even green infrastructure, is a relatively slow, low-return investment. To rebuild the economy right now, we need fast, high-return investment, public and private.

“First, we need public investment in people: health care to keep us productive; education to train us for new jobs or upgrade basic skills; and extended unemployment insurance.

“Second, we must unburden the sector that provides the most employment and the highest and fastest return on investment: small business.

“Here is how: Rebate the payroll (Social Security) tax on low-wage earners. This tax has become a major killer of small-business jobs. Then reduce deficit spending. Treasury runs a deficit by selling bonds; the more that banks can stock up on safe government bonds, the more they will cut off relatively risky (but high-return) small business. But how to reduce deficit spending? Start by killing military pork.”

Polly Cleveland

2 thoughts on “Rebuild the Economy: Invest in People”

  1. Johnston presents a bit of a false dichotomy – there’s no reason the Obama administration can’t work on BOTH short-term and long-term projects at the same time.The quick-fixes suggested in the piece make a lot of sense. But at some point America needs to put money into the long-term, big-ticket infrastructure projects that have been neglected over the last decade.

  2. The present economy presents an array of possibilities and liabilities. Once Obama takes office he has an economy that’s in shambles. Too bad the people he has chosen to head his financial cabinet have ties to the old wall street. He can’t change the damaged done in four years and if he proves capable of doing so he can use the title of a “miracle” worker. The main thing he will probably have to deal with is political sabotage by politicians who want to exert their fake leadership to their constituents by basically screwing them over in the process. If we stand by and allow this to happen again then we deserve what we get.

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