If someone turned on the news during the past few weeks, it would be hard to blame him if he thought the most pressing issues in the world right now are budgets and abortions. In recent news, the economy has taken a backseat to raising taxes and cutting spending.
That’s despite the fact that the latest jobs numbers were fairly mixed. Yes, unemployment did drop to 7.7 percent, and the U.S. economy added 146,000 jobs in November despite Hurricane Sandy. But the size of the labor force shrunk, and September and October’s jobs numbers were revised downward. The mixed results show the country is undergoing a very sluggish recovery; if the United States keeps adding jobs at the three-month average of 139,000 jobs per month, the nation wouldn’t get to full employment, meaning about 5 percent, for more than a decade.
Yet turn on the news and the big concern is the “fiscal cliff,” a series of tax hikes and spending cuts set by the federal government to kick in at the end of the year. If the feds don’t act, the U.S. economy will shrink by 0.5 percent and unemployment will spike up to 9.1 percent, according to the Congressional Budget Office (CBO).
The fiscal cliff is a self-inflicted problem. It’s the result of politicians tackling faux debt crises through faulty automatic triggers. The thinking at the time was simple: Congress wanted to create automatic triggers that would kick in if legislators failed to reach a budget-balancing deal. The idea was that the triggers would be so outrageous — Automatic cuts to the U.S. military? Like those would be tolerated in America! — that politicians would be forced to balance the budget once and for all.
Here we are, more than a year later, and those outrageous triggers are threatening to become reality.
To top it off, the Bush tax cuts are also set to expire at the end of the year, creating the perfect storm of tax hikes and budget cuts to ravage an already-lacking economy. Throughout the years, Congress loaded the gun, self-assured it would never fire; today, the U.S. economy is about to be shot.
What’s truly sad about the self-inflicted crisis is Congress is now stuck on solving the triggers and leaving the top job-creating policies behind. Remember emergency unemployment insurance benefits and the payroll tax break? Apparently, neither does Congress. The policies were passed in the onset of the Great Recession to help put the economy back on track, and they’re also set to expire at the end of the year. But the policies seem to be getting little-to-no consideration in budget deals, even though the CBO estimates they are some of the best policies per-dollar for creating economic growth.
In fact, stimulus policies are actually negotiable items in budget talks. That’s right, the policies that would create economic growth — meaning the policies that would help with America’s most pressing problem — are being used as political pawns.
At the state level, things don’t look much better. Instead of focusing on jobs and new ways to bring businesses to Ohio, the state legislature has spent a bulk of its time on limiting abortion, defunding Planned Parenthood, tackling illegal immigration, enacting weak regulations on fracking, imposing drug-testing requirements on welfare recipients, cutting funding to schools and local governments, funding more of Ohio’s underperforming online schools and privatizing every agency and facility possible.
Too much of the state legislature’s time has been filled with distractions, and some approved actions — particularly funding cuts to schools and local governments — have actually dampened economic growth.
The good news is Cincinnati’s city government has performed much better than the state and federal governments. Despite many hurdles, the streetcar is pushing forward, alongside promises to create jobs and a better business environment. Even though the city faces a massive budget deficit mostly thanks to state funding cuts, Cincinnati is doing everything it can to avoid laying off 344 city employees, and the latest budget proposal even includes a program that will provide funding for redevelopment projects in Cincinnati. The budget isn’t perfect — privatizing public parking services is definitely not a progressive fantasy — but at least it maintains pro-growth policies instead of slashing budgets, dramatically raising taxes and screaming about deficits.
At the end of the day, the reality is setting in that the past year of campaigns may have been a farce. Jobs and the economy filled the campaign trail, but it seems governments at all but city levels would rather shoot themselves in the foot than meet their promises.