By Dale Bowling
There was an article in the Washington Post http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/30/yikes-economy-shrinks-in-fourth-quarter-for-first-time-since-09/ this morning that showed that for the first time since the official end of the Bush Recession, economic growth contracted this past quarter. The downturn comes largely from cuts in military spending.
Government buys less stuff from people and employs fewer people and guess what happens? Fewer people have money in their pockets. It's actually not hard math.
But you would not know that from hearing many people in Washington among other places who have drank too deeply from the Font of Fiscal Austerity.
Since 2011, the Congress and the White House have cut $1.5 Trillion with a "T" from the Federal Budget. They have together agreed to an addition $500 Billion (with a B) in new taxes, nearly all on the wealthiest Americans. That is together $2 Trillion toward deficit reduction.
But sequestration will mean further cuts and the more cuts we're going to see, the more severe the economic downturn will be for exactly the same reason this past quarter has seen an about-face in growth.
Some in Congress subscribe to the "Starve the Beast" approach to Government, but unfortunately the Beast in question is job growth. More cuts means less money being funneled into job creation.
A fragile recovery needs more help from Government, not less. Once the economy is back on its feet, cut spending and pay down the debt like we've done countless times since World War II.
How's this for out-of-the-box thinking? Right now is the perfect time for that Big Infrastructure Bill which America has desperately needed for decades. An influx of money now would promote more job growth and economic renewal in a year than austerity will produce in twenty.
The American Jobs Act has been sitting and waiting patiently for passage for a year and a half. It's fully paid for by offsets in spending and could be implemented immediately. Economists think it would produce a couple of million jobs, give or take.
The only reason to not pass it hitherto has been that the Republican House wanted to deny President Obama anything that might help his reelection, but since America has made that issue irrelevant, it's time to dust it off the shelf and put it to good use.
But it shouldn't stop there. We need to invest in our infrastructure. It's been decades since we have and it's showing its age. Not only would a big infrastructure bill foster job growth, it would leave us with a top notch 21st century infrastructure that can fuel economic growth for the next half century.
Literally everyone would win.