Austerity Hastens Economic Decline

From an Article by Stephen Lendman

Obama and Congress face Depression conditions. Roosevelt addressed them in the 1930s. Imagine how austerity then would have imposed greater hardships. Instead Americans got Social Security, homeowner’s loan refinancing, and moratoriums on foreclosures. Small farmers were helped unlike current subsidies earmarked for agribusiness. Unemployment insurance was established in partnership with states.

FDR’s alphabet soup of programs created jobs. Accomplishments were impressive. They included building or renovating 700,000 miles of roads, 7,800 bridges, 45,000 schools, 2,500 hospitals, 13,000 parks and playgrounds, 1,000 airfields, and other infrastructure projects. Unemployment dropped from 25% in May 1933 to 11% in 1937. It then spiked when victory was declared too early. War production revived economic growth. Full employment followed. Mirror opposite conditions exist today.

Over three years after the National Bureau of Economic Research (NBER) declared America’s recession over in June 2009, unemployment, based on how it was calculated in the 1980s, approaches 23%. Poverty is at Depression levels and rising. Stimulus and job creation programs are absent. Austerity is policy. So is directing America’s resources for militarism, wars, banker bailouts, and other corporate handouts. Growing public needs go begging.

On accepting his party’s 1932 presidential nomination, Roosevelt pledged “a new deal for the American people” and delivered. Obama promised “change you can believe in” and lied. In his second inaugural address, Roosevelt saw “one-third of a nation ill-housed, ill-clad, ill-nourished.” Millions, he said, had too little income to live on. Disaster threatened them daily.

In his last State of the Union Address (January 11, 1944), he proposed a second bill of rights. He called the initial one “inadequate to assure us equality in the pursuit of happiness.” His solution was an “economic bill of rights.” He wanted it to guarantee: employment with a living wage; freedom from unfair competition and monopolies; housing; medical care; education; and greater social security than provided in his first 11 years in office. He urged greater protections from the economic fears of old age, illness, accident, and unemployment.

Roosevelt’s vision was impressive even though his proposal was only partially implemented. Today, it’s fast eroding. Bipartisan neoliberal ideologues want social America destroyed.  For over three decades, New Deal and Great Society programs eroded, ended, or are earmarked for elimination.

Banker and other corporate priorities matter most. Austerity places greater burdens on ordinary people struggling to get by.  Misery Index readings show why. Prior to November 1980’s election, it was 22%. It helped Reagan defeat Carter. Today it’s 27% and rising. Occupy Wall Street reflects public angst.

Hard landings look inevitable. On January 1, around $2.2 trillion in sequestered budget cuts are scheduled. Trillions more are likely after November elections.

Around half a million Americans lost extended job benefits earlier this year. On

January 1, expect another two million to join them. America’s Emergency Unemployment Compensation (EUC) ends. Beginning next year, maximum benefits last 26 weeks. Average unemployment duration way exceeds it. Obama officials said renewal won’t be sought.  People need this money to survive.

Republicans and Democrats cut a deal to spurn them. Doing so institutionalizes poverty for growing millions. Beginning next year, less than a third of jobless workers get unemployment benefits.

People struggling to get by increasingly are on their own. Where this ends, who knows?

 

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. His new book is titled “How Wall Street Fleeces America: Privatized Banking, Government Collusion and Class War”

 

 

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