It’s Morning
by digby
This piece from National Journal explains all:
“The White House shows little sign of worrying about a dip in growth
and how it might affect the unemployment rate, which has fallen by a
percentage point since the year began but still sits at 8.8 percent,
danger territory for an incumbent president seeking reelection.Obama advisers largely believe, instead, that the economy has moved on
from what White House officials call a “Phase 1” recovery—in which the
government was forced to cut taxes and spend heavily to pump up
consumer demand and rescue the nation from the brink of another Great
Depression.Now, the officials believe, the recovery has reached “Phase 2,” where
the prospects of a double-dip recession are slim, expanding growth can
survive a hit in government spending, and the total level of spending
cuts is less important than the composition of them. (That reasoning
helps explain why the White House was willing to agree to $38.5
billion in cuts to the current-year budget in negotiations last week,
while insisting on protecting education and research programs the
administration sees as key drivers to future growth.)”
There you have it. 8.8% unemployment is no reason not to cut spending and we need to think about the future. But I have a sneaking suspicion that the futures of people who are financially suffering are impacted quite a bit. It’s not an abstraction to them — every day they are out of work is another day or a family has less money or freedom to better themselves, the future is impacted.
Whatever. It doesn’t matter anyway. The di has been cast and it’s a matter of waiting to see if the country will slowly crawl out of its economic hole or if deficit mania pushes it back in. The long term danger is in this notion that cutting spending for the future will somehow speed up the recovery now. If you don’t have a strong philosophical commitment to the social contract, it could be very tempting to arbitrarily slash spending on people who won’t feel it until many years down the road.
The spech tonight should give us some clue about how that’s going to go.
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