Two Must Reads on the Economy: Leonhardt on "Jobs Bill v. Deficit" & President Obama in Pittsburgh

All else equal, I consider myself a pretty strong believer in balanced budgets. Here’s the thing, all else isn’t equal in the short term. As David Leonhardt writes in the New York Times, unemployment is at a 27 year high, and there’s a proposal moving through Congress to help address this in a responsible, economically literate manner. Leonhardt’s column explains why it’s a no-brainer.

A highlight, but the full column is worth a read:

There are two arguments for more stimulus today. The first is that, however hopeful the economic signs, the risk of a double-dip recession remains. Financial crises often bring bumpy recoveries. The recent troubles in Europe surely won’t help.

The second argument is that the economy has a terribly long way to go before it can be considered healthy. Here is a sobering way to think about the situation: If the next four years were to bring job growth as fast as the job growth during the best four years of the 1990s boom — which isn’t likely — the unemployment rate would still be higher in 2014 than when the recession began in late 2007.

Voters may not like deficits, but they really do not like unemployment.

Looking at the problem this way makes the jobs bill seem like less of a tough call. Luckily, the country’s two big economic problems — the budget deficit and the job market — are not on the same timeline. The unemployment rate is near a 27-year high right now. Deficit reduction can wait a bit, given that lenders continue to show confidence in Washington’s ability to repay the debt.

As a result, Congress does not have to choose between the problems. It can pass the jobs bill, putting people back to work, and even pass a separate bill to help struggling states. History has shown that state aid, which prevents layoffs of teachers, emergency medical technicians and other workers, is the single most effective form of stimulus.

Additionally, yesterday in Pittsburgh, President Obama gave perhaps his best economic speech yet. Coupled with the recently released National Security Strategy, the President has given a pretty clear sense as to where his administration is headed on the economic front. 

Again, a highlight, but read the whole speech:

In the immediate future, this means doing whatever is necessary to keep the recovery going and to spur job growth.  But in the long term, it means recognizing that for a lot of middle-class families -- for entire communities, in some case -- a sense of economic security has been missing since long before the recession began. 

Over the last decade, these families saw their income decline.  They saw the cost of things like health care and college tuition reach record highs.  They lived through a so-called economic “expansion” that generated slower job growth than at any prior expansion since World War II.  Some people have called the last 10 years “the lost decade.” [note: for background on the lost decade, read "A Lost Decade for Everyday Americans"]

So the anxiety that’s out there today isn’t new.  The recession has certainly made it worse, but that feeling of not being in control of your own economic future -- that sense that the American Dream might slowly be slipping away -- that’s been around for some time now.  And for better or for worse, our generation of Americans has been buffeted by tremendous forces of economic change.  Long gone are the days when a high school diploma could guarantee a job at a local factory -- not when so many of those factories had moved overseas.  Pittsburgh, a city that once was defined by the steel industry, knows this better than just about anybody.  And today, the ability of jobs and entire industries to relocate where there’s skilled workers and an Internet connection has forced America to compete like never before. 

From China to India to Europe, other nations have already realized this.  They’re putting a greater emphasis on math and science, and demanding more from their students.  Some countries are building high-speed railroads and expanding broadband access. They’re making serious investments in technology and clean energy because they want to win the competition for those jobs. 

So we can’t afford to stand pat while the world races by.  The United States of America did not become the most prosperous nation on Earth by sheer luck or happenstance.  We got here because each time a generation of Americans has faced a changing world, we have changed with it.  We have not feared our future; we have shaped it.  America does not stand still; we move forward.