Democrats and Republicans often get into arguments about the size and role of government. Liberals believe in a strong role to protect the most vulnerable in society while conservatives favor the private sector, stressing personal responsibility. Both sides should at least agree that fixing America’s broken economy is the country’s top priority and that an efficient government will be needed to accomplish that goal.
Unfortunately, too often the government has proven to be slow to respond to the needs of its citizens. The unemployment crisis is a good example of this. The Recovery Act (also known as the stimulus) was passed with mostly Democratic support in 2009. The result was over 3 million jobs created. Many Republicans will have you believe that it created no jobs, including elected officials that know better, especially since many of these same people (Michele Bachmann for instance) were lobbying for money to go to their districts.
Now that the stimulus has run out the economy has slowed. A new round of economic measures were proposed by President Obama and rejected by Republicans who control the House. Democrats should rightly condemn their obstructionism as purely political. Their top goal, as stated by Senate Minority Leader Mitch McConnell, is to defeat President Obama. The American people deserve better than that. But to ignore the Recovery Act’s mistakes would itself be a mistake.
Looking back at the Recovery Act there are a few things that we can say that today is obvious. For one, it was too small in size. The United States economy was nearly $15 trillion in 2010. The Recovery Act – extended over the course of roughly two years – pumped the economy with spending that equated to only 2.6 percent of GDP. Compounding this problem was the fact that the Recovery Act was a smorgasbord of spending that Democrats had sought for a long time after over 12 years of Republican rule in Congress, but was not necessarily the most effective way at reducing unemployment. Republican plans that focused solely on tax cuts were even less likely to cause a boost to the economy.
We need more signs like this on the road.
As they say hindsight is always 20/20 yet it should have been clear at the time that what was being done would not nearly be enough. The federal government was essentially paying to fill the budget holes of states like Texas, which cut funding to schools only to replace that money with stimulus money. The stimulative result was minimal since they were essentially swapping state money for federal money. This could have easily been predicted and rectified, perhaps by adding provisions requiring the states to maintain current funding levels if they were to accept federal dollars.
Other problems included a high-speed rail network that gave out grants to states rather than directing the funding through the Department of Transportation. After Republican governors took control of states like Florida, Ohio and Wisconsin, they quickly rejected the money, putting major gaps in the future rail network. If President Obama really believed in the future of high-speed rail and the economic opportunities that come with it, why were the details left to the states? Like much of the Recovery Act this reliance on state government, often run by inefficient and politically hostile officials, hurt the prospect of job growth.
Ultimately, fixing America’s broken economy will take cooperation. Republicans will have to assume responsibility instead of sitting on the sidelines and attacking the president. Democrats will have to demand more efficient programs. A bipartisan coalition of left-leaning unions and the right-wing Chamber of Commerce came out in support of infrastructure spending. This would be a good start. Providing tax credits for small businesses that hire workers would also be a good idea that should win broad support. I would even advocate reducing America’s corporate tax rate, making American business more competitive, if it were met with an increase in the tax rate for the top 1% to offset the lost revenue. It’s time to get smart and efficient with government.