Where Would Progressive Economic Recovery Policy Start?

As California remains mired in a severe recession, the worst since the 1930s, and with little job growth on the horizon, there’s no time to waste in implementing a strategy of economic recovery aimed at creating good jobs for as many people as possible (as opposed to the right-wing strategy of giving more money to the rich and hoping they’ll use it to hire a few people at low wages).

To that end, Jean Ross and Alissa Anderson of the California Budget Project have published an op-ed in the Riverside Press-Enterprise titled “How To Get the State’s Economy ‘Unstuck’. They list three specific items that can get the state’s economy growing again, and soon:

Extending unemployment insurance benefits: Federally supported unemployment insurance benefits will expire in November, long before there will be enough jobs to reduce the ranks of the unemployed. Extending benefits won’t just help keep workers and their families afloat; it will keep money flowing into local economies.

Minimizing spending cuts: Economists have long recognized that helping struggling families is one of the most effective ways to boost the economy. That’s the case because money that goes into the pocketbooks of struggling families goes right back out to landlords, grocery stores, gas stations and other merchants. Conversely, cutting public structures such as CalWORKs, the state’s welfare-to-work program, or state-supported child care will exacerbate the downturn. And most important, deep cuts to schools will compromise the state’s long-term ability to compete in the global economy.

Raising taxes on high-income earners: The wealthy have made significant income gains for more than a decade while middle-income residents have lost ground. Revenue increases are part of a balanced approach to solving the state’s budget gap. But they must be carefully targeted to be most effective. Economists tell us that raising taxes on those with high incomes does less harm to an ailing economy than cutting spending.

All of this is a sensible approach to the state’s budget and job creation priorities. Unemployment benefits are a major source of economic stimulus, helping keep small businesses afloat as well as, obviously, the unemployed workers themselves. Public services are especially important in a recession like this, where neither households nor businesses feel confident spending money, meaning government has to step in and play that role. The CBP is absolutely right that we must ensure these services are funded so that we can have the economic recovery we deserve.

Finally, their point about taxes is especially important. We can go further than they could in the brief space allotted to a newspaper op-ed: given that the wealthy are sitting on huge sums of money that they’re not investing, it’s beneficial to overall economic stability and prosperity that we get that money and use it to fund the kind of public programs that will create jobs and sustain workers by meeting their health care and educational needs.

Economic recovery will never come from the top down. It comes from the bottom up, when working Californians are provided the jobs, wage growth, and basic economic security they need.

5 thoughts on “Where Would Progressive Economic Recovery Policy Start?”

  1. * primary residence cram down.

    People can’t increase demand even if they have wages if it’s all going to pay debt.

  2. The recession has been very good to big corporations and wealthy individuals. In fact, they want it to continue in order to bring the American middle class to its knees and cease to exist. They. Have no interest in “economic recovery.”

    Perhaps they think that in the future they will market their crap overseas, so they won’t even need us as consumers anymore.

    What they’re doing is hoarding their wealth like ugly, selfish misers, spending lavishly only to impress each other. They are not members of the American community. They are leeches. That is the picture we need to show.

    OK, I feel better now.

  3. Although a little slower than the three ideas in the Op Ed, programs like the L.A. 30/10 proposal — where 30 years of local taxes for transportation projects will be spent in a period of 10 years through loans from the federal government  — could be implemented across the state in counties where there are transportation taxes in place already.  This would put people back to work while also speeding up the improvement of our infrastructure (which will also be helpful to the economy through greater transportation efficiency). With interest rates low, unemployment high, and traffic snarled, 30/10 analogues should be set up across the state.

Comments are closed.