POLLIN: I think it’s a very credible budget that the Congressional Progressive Caucus has put out, the “Better Off Budget”. Let’s start with the things that we know are very straightforward. The projections on job creation are somewhat speculative. But here’s some of the basic things.
The budget that they’ve laid out directly attacks austerity. So that’s number one. That’s really outstanding. So, for example, the cuts to food stamps, I mean, some really basic stuff: 47 million people are facing cuts in food stamps. That’s 15 percent of the population. Twenty-two million children are facing cuts in their access to food. So we are directly attacking food insecurity through the basic budget. So if it didn’t do anything else, just starting there is a really good place to start.
Spending on infrastructure, spending on schools, spending on health care, spending on the green economy, all of those things are expanding, not contracting, under the congressional budget’s Better Off Budget.
So all of those things are really critical. They’re all moving in the right direction.
Now, if you spend more money in these areas, obviously, you have to pay for them somehow. So what do they do in terms of taxes?
Fairly good analysis until he gets to the part of you have to pay for it. I wish Polin had taken a fire-extinguisher to that part. Why play into the hands of the people who are making such big deal out of deficits during a weak recovery when in fact the deficits help us recover faster? I guess the ideas of Modern Monetary Theory have not reached the PERI at UMass Amherst. Are they too far west in Massachusetts? I am pretty sure they must be connected to the state’s high bandwidth internet backbone, so that can’t be the reason they haven’t gotten the news yet.
I think the best thing that Robert Pollin could have said instead is the following:
At this point in the economic cycle, deficits aren’t harmful if they are spent for the right things. Too much of the money pumped into the economy by deficits and the Fed’s QE policy are going primarily to the wealthy. They use the money for speculative investments. Not only are these investments harmful to the economy for the instability they produce, but they also don’t involve creating many jobs, and certainly not useful jobs.
So, in this case, it actually helps the economy to tax this money away from the people who are misusing it. Rather than encouraging people to create these harmful investment products, we should be doing everything we can to discourage them.
This kind of tax increase is not a job killer, but in fact is a job creator. This is especially true when the money collected is put to a use of creating jobs and producing things the economy desperately needs, anyway.
In fact I emailed the above suggestion to PERI.