Peterson Study: Tea Party Extremism Cost Millions of Jobs, Risks Millions More
Everyone should heed the clear warning issued by Sen. Ted Cruz (R-Texas), his cohorts on Capitol Hill and the leaders of outfits such as the Tea Party Express and FreedomWorks, all enraged and determined to lash out again as soon as possible. “This was going to be a multistage, extended battle,” said Cruz, “but we’ve also seen a model that I think is the model going forward to defeat Obamacare, to bring back jobs, economic growth...”
Only a dwindling fraction of voters is still mesmerized by such demagogic nonsense, but their anger intimidates enough Republicans to ensure that Cruz and company can seek to sabotage the economy again—and they will. So it is vital for everyone to understand what these vandals have inflicted on us already.
We probably will not know the full cost of the shutdown and the near-default for several months, if ever, but fresh estimates are now arriving daily. According to Standard and Poor’s, the financial ratings agency, the shutdown alone reduced economic activity in the United States by at least $24 billion and cut growth in the current quarter by as much as 0.6%. That means a loss of thousands of jobs and billions in household income just when the economy would traditionally surge upward for the holiday season.
Crisis-Driven Fiscal Policy
But that is just the beginning of a much grimmer inventory of suffering, which can be traced back more than two years to the first episode of tea party debt-ceiling bluster. For that assessment, we can look to none other than the Peter G. Peterson Foundation—named for its creator, a former Republican commerce secretary and fanatical fiscal hawk whose latest contribution to public discourse is a thorough study, with charts, of “the cost of crisis-driven fiscal policy.” Peterson’s full study is worth reading, but its essential points are simple enough.
The repeated manufacturing of partisan fiscal crises has created sufficient uncertainty to reduce growth since 2009 by as much as 0.3 percentage points annually—eliminating as many as 900,000 potential jobs.
Now add on the wrongheaded cuts in federal discretionary spending caused by budget sequestration—the awful “solution” to the 2011 debt crisis. That reduced annual growth by 0.7 points since 2010 and raised unemployment by almost a full percentage point, or 1.2 million lost jobs.
Finally, the report examines two possible economic scenarios that could follow a Treasury default: a “brief” recessionary interlude that would see unemployment jump to 8.5%, costing 2.5 million jobs, and a longer, deeper, more volatile recession in which joblessness would rise to 8.9% and more than three million jobs would be lost.
Just as disturbing as all of this sad waste of human potential is the incredible pettiness of the goals pursued by the Republican leadership. Their ultimate, most pathetic demand was to deny health insurance to their own aides.
So when Cruz and the tea party tell you their holy crusade against health care will “bring back jobs,” assume the opposite (and act accordingly). There is no bipartisan compromise on offer here—only more of the same ruinous obstruction, and worse.
Your job won't be secure until they lose theirs.
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