Only government has the resources to get the economy going, and any suggestion that tax cuts will improve the economy and created jobs are misguided, according to liberal economists who spoke Thursday at the Campus Progress National Convention in Washington.
“The government acts as a stabilizer,” said panelist Heather Boushey, senior economist with the Center for American Progress during the panel titled Economics for People Who Are Not Economists. “In bad times you (government) are the only entity that can do this.
“You cannot allow individuals to do this. It is the full faith and credit of the United States that can make this happen.”
Boushey blames the spending habits of the Bush administration for the current economic mess because it took money that should have been saved — like happened during the Clinton era — out of the economy.
The Clinton era experienced more taxation, governmental savings and deficit and debt reduction.
Boushey characterized Bush’s attitude about federal spending as:”Why not just spend more it’s more fun.”
This, she said, led to huge deficits that PhD economists “will say [was] the absolute wrong thing to do.”
“The worst thing to do in an economy that is going strong is to be borrowing money and not paying it back,” Boushey said.
She scoffed at the Republicans for suggesting that those earning more than $250,000 cannot afford to pay more in taxes because doing so will kill jobs, noting that the economy did well during the Clinton years when the top tax bracket was much higher than it is today.
The Obama administration’s effort to reduce payroll taxes under the over $787 billion stimulus hasn’t led to increases in companies investing and creating jobs, which she claims undermines the idea that tax cuts spur economic growth.
All of the panelists agreed that the stimulus did not go far enough and that more government spending was needed.
The theme of economic “fairness” and economic “progress” featured prominently across the discussions, with participants asking about what can be done to move the economy away from being driven by consumption and what could be done to encourage student debt forgiveness.
Noel Ortega, new economy working group coordinator with the Institute for Policy Studies, suggested that the economy needs to be made more “democratic” using mechanisms such as cooperatives and state-owned banks.