Why Failure of the Super Committee is a Good Thing

Well, it’s a good thing if they first repeal the automatic sequestration provision that would cause catastrophic cuts to the military, medicare and other social programs that would likely send us into another deep recession.

Of course, if the Super Committee were to be successful at meeting their own goals, the job cuts caused by their cuts would have the same effect, another deep recession.

It makes sense, when you are an individual, to cut spending when your income has been cut. During a recession, tax revenues shrink, starving the government of money, causing additional deficit spending. But, as an individual, when you spend money, it doesn’t directly affect your income. When governments spend money, correctly, it can put people back to work, which generates new private sector spending and tax revenues, which works to reduce the deficit much faster than cutting spending.

To make it a bit more concrete, cutting spending by a dollar saves you one dollar plus whatever interest you would have spent. Right now, interest rates are very very low, so cutting a dollar only saves you a dollar and a few pennies. On the other hand, spending a dollar on creating a job, say repairing roadways, generates money in several ways. Money comes back from income and payroll taxes. Tax payers save money on automobile maintenance, money they can use to buy goods, which helps create more jobs. That single dollar, spent the right way, can generate several dollars in tax revenue.

The point is, not that we shouldn’t deal with the deficits, but that we need to deal with them AFTER we’ve restored robust job growth. If we cut the budget, that will mean massive cuts in public jobs, just at a time when the economy is crawling it’s way towards health. If we wait until we are recovering, then job growth will do most of the work for us, minimizing the pain.

The fact that Congress is back pedaling is an indication that even the Republicans have started to realize just how grim things will be if the cuts are made.

Congress, and specifically the Republicans have been playing Russian roulette with the American economy for far too long. They have purposely been blocking every attempt by the Obama Administration to create new jobs and try to restore some measure of security for every day Americans. This is all due to their obsession with unseating Obama. They know that, historically, incumbent presidents don’t do well when the economy is bad. The Republicans are willing to let you and everyone else suffer for another year, simply to get their hands on the White House.

If that isn’t enough to make you sad, look at who they are offering as potential replacements for Barak Obama. The current front runners in the Republican party are Mitt Romney, who never met a campaign promise he wouldn’t make and wouldn’t forsake, and Herman Cain who is entirely clueless on foreign policy and thinks it makes sense to restrict all Congressional legislation to three pages.

If you care about jobs, please call or write your representative and tell them you want them to rethink the deep cuts in the budget. Tell them that the time to deal with the recessions is after we put people back to work.

About rben13

I'm a writer/programmer/QA Analyst living near Boston with my beautiful wife, Heather, and our two cats, Aran and Sam.
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