Anyone still wondering why they call economics the dismal science need only take a look at the latest budget forecast from the Congressional Budget Office. It lays out a grim fiscal future no matter what voters and Congress do between now and Jan. 1.
The current path leads straight to the fiscal cliff — nearly $500 billion in tax increases in 2013, combined with sharp cuts in federal spending. Without changing course, CBO warns, economic conditions in 2013 “will probably be considered a recession,” with unemployment around 9 percent late in the year.
The CBO’s “alternative” scenario assumes that Congress will head off steep tax hikes and deep budget cuts. If that happens, the agency projects that unemployment and growth will remain at about the same levels as in 2012, with another $1 trillion budget deficit likely in 2013.
If that sounds like a terrible choice, it’s because it is grounded in a stubborn belief that government spending is the main driver of the nation’s economy. Cut spending, the CBO economists figure, and you necessarily stall the economy.
The dismal record of stimulus spending and quantitative easing over the last few years should by now have persuaded Capitol Hill, Wall Street and Main Street alike of the need for a different approach.
That approach would combine restrained government spending, lower tax rates, entitlement reform, and the repeal of unwelcome government mandates that increase uncertainty. Letting American businesses, workers and consumers keep, save and invest more of the money they earn is the way to economic health.
Whoever voters put at the helm of the ship of state on Nov. 6, they must insist on the plotting of a new economic course.
However, I'm afraid it' too little too late. We're in for a tough road ahead no matter who wins this election.
By P.F. Wingard
Have you ever seen the
“lifeblood of an economy?” I’ve heard the term used to the point of
becoming a cliché, but never visualized it. Thinking back, it was in
plain sight where I grew up. I never knew it for what it was then, for
what it meant, and now I miss it.
Where I grew up, a small
Southern town, the “lifeblood” was in the town’s textile mills. The
largest of them, called the American Thread, turned raw cotton into
spools of thread. Other mills wove thread into fabric. Still others
turned bolts of fabric into clothing. A small train would come to town
twice a day, pulling four or five box cars; it would drop off bales of
cotton and leave with bolts of cloth or crates filled with spools of
thread.
I’m struck with how magical it all seems, viewed from an
age where technology should make it seem just the opposite. I can no
more imagine how to produce goods like that than they could understand a
cellphone or a personal computer. But there is a difference. The town
of my childhood wasn’t an idea; it was real. What it produced could be
held in your hand or used to make other things. It could be witnessed.
This is becoming so rare.
As the mills were choked off, the town
shrank. The store-fronts on Main Street closed one by one. Slowly, the
town became a “bedroom community,” meaning people only slept there; they
no longer worked or shopped locally.
The magic of the small town
used to be so American, but now, not so much. I miss the sense of a
place’s value, the sense of a community born of a shared purpose. We all
had a hand in the town’s magic. Three times a day, when the streets
filled, we reminded each other of our mutual dependency. When the train
passed through, we all saw the fruit of our combined labor.
As a
country, we’ve lost more than can ever be said. We continue to perceive
that we add value but, like an amputated limb, it is no longer real.
We’ve become a nation of dot-coms instead of widgets. We’re part of a
global economy whose lifeblood is all but invisible to the average
person. We are cogs of multinational corporations.
The train isn’t
coming through America as much anymore; the track is being ripped out,
leaving a scar through the country’s heart. The magic has faded and what
made America is going fast, if not already gone. In the growing void
are re-purposed lives, lives that are less connected and interdependent.
We are becoming a lonely people who no longer pull together in a shared
purpose, who can no longer see the fruit of its labor or take personal
pride in its products. Since we depend less on each other, we are prone
to squabble over the scraps. “Who to blame” is the most deadly symptom
of our disease. Instead of repairing the damage, it rips us further
apart.
Small towns were far from perfect and there were many
aspects that I’m glad have passed. My point is not so much how to fix
things but more of a gentle reminder that not everything in the past was
bad. We have but to remember that we once built things and we can again
if we stop trying for the next big idea or quick buck.
The Atlanta Journal-Constitution
