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Thursday, April 07, 2011

GOP Utopia: Low Wages, High Unemployment

I'm tempted to wish Republican's balanced budget amendment was in force, because this bad idea would sink another bad idea. According to Jed Williams at Investors Business Daily, "Under the balanced budget amendment proposal unveiled last Thursday with all 47 GOP senators on board, the blueprint presented by House Budget Committee Chairman Paul Ryan on Tuesday would be unconstitutional until sometime after 2030."

But then I remember that the GOP's amendment is never going to go anywhere -- just like Paul Ryan's long-term budget. In fact, I have my doubts that either is even meant to survive. Constitutional amendments have to clear such a high bar that an actual movement is required to put them in place. Right now, the teabaggers seem to have all gone home and the only thing resembling a movement in this country is a backlash against draconian spending cuts in the states. I want to say the window of opportunity has closed, but the fact is that it was never even open.

Constitutional amendment proposals from Republicans tend to be vote-getting gimmicks to display how serious they are about the base's pet issues -- without actually being serious at all. Banning marriage equality, banning the rampant scourge of flag burning, and English-only amendments pop up all the time, only to die after being neglected even by their authors. These aren't fights Republicans are willing to have, these are fights Republicans are willing to pretend to have. A "stop me before I spend again!" amendment fits that description very well.

↓ CONTINUED AFTER THE JUMP ↓


And, like the balanced budget amendment, Paul Ryan's budget is more a statement of principles than a serious document. Riddled with wishful thinking and logical holes, it reminds me of this old Sidney Harris cartoon:

And then a miracle occurs


Unemployment will be low, the deficit will shrink, and everyone will be happy thoughout the land -- after the budget miracle occurs. Not surprisingly, Ryan's projections aren't just being greeted with healthy skepticism, but with outright mockery. To see the best of it, check out Paul Krugman's take.

But the principles in Ryan's document are disturbing; slash spending on entitlements, lower taxes on the wealthy, raise taxes on everyone else. These are called "tough choices" by millionaires for whom the choices aren't tough at all. It's a massive redistribution of wealth from you to them. Tough for you, sure. For them? Pffft!

And, to return to Krugman, before the Ryan plan, there was a report from House GOP. That document calls for the suppression of wages and increased unemployment -- right out there, in the open, unabashedly.

Two weeks ago, Republican staff at the Congressional Joint Economic Committee released a report, "Spend Less, Owe Less, Grow the Economy," that argued that slashing government spending and employment in the face of a deeply depressed economy would actually create jobs...

Here's the report's explanation of how layoffs would create jobs: "A smaller government work force increases the available supply of educated, skilled workers for private firms, thus lowering labor costs." Dropping the euphemisms, what this says is that by increasing unemployment, particularly of "educated, skilled workers" -- in case you're wondering, that mainly means schoolteachers -- we can drive down wages, which would encourage hiring.


If you read this blog even occasionally, the obvious should leap right out at you -- employers hire because they need people, not because those people come cheap. If we drive down wages for everyone -- and yes, that is the plan -- then employers just wind up paying less for labor. There's no hiring binge. In fact, lower wages would guarantee a drop in demand, which would depress hiring and wages even further, which drops demand, which depresses wages and employment -- lather, rinse, repeat. In short, it's a recipe for recession.

Who does this help? Employers, of course. See we're busy thinking about what all this means for America, but we live in a global economy. If Americans can't afford to buy stuff, who cares? There are plenty of markets in plenty of other countries where their governments are foolishly more concerned with the welfare of their people than the welfare of their corporations. Can't sell widgets in Des Moines? Oslo's always buying. Just have your child laborers start printing the labels in Norwegian.

If Republican budget fairy tales tell us anything, it's that they aren't awfully concerned with the vast, vast majority of Americans. They represent that top one or two percent of wage earners and everyone else who votes for them are just chumps. Maybe your taxes are too high, but cutting at the top while raising yours isn't tax relief. And depressing your wages to the point where you're paying into a lower tax bracket isn't much help either. But that's the plan -- they're telling you as much. So maybe you should believe them.

They're calling it "fiscal sanity," but it's self-destructive madness for you to back it.

-Wisco


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