Labor & Employment Law

U.S. Poverty, Home Repos Soar, 300 Economists, Policymakers Say Time to Act BIG

By Tula Connell

Two bad economic reports this morning reinforce today’s call by 300 economists and policymakers urging the president and Congress to ?redouble efforts to create jobs? through investment in infrastructure, sending aid to the states and creating public service jobs.

First, the bad news.

• U.S. poverty hit its highest rate since 1994, according to the U.S. Census Bureau. In 2009, one in seven people were in poverty, and one in five children were in poverty.  
• U.S. home seizures reached a record for the third time in five months in August as lenders completed the foreclosure process for thousands of delinquent owners, according to RealtyTrac Inc. Bank repossessions climbed 25 percent from a year earlier to 95,364. RealtyTrac sees a record 1.2 million repossessions this year, up from just under 1 million last year, with more than 3.2 million homes in some stage of foreclosure.

Such data make all the more relevent the statement by 300 prominent economists, “Don’t Kill Growth and Jobs in the Name of Deficit Reduction.”  In short, the statement urges the president and lawmakers:

• Don?t kill growth and jobs in the name of deficit reduction.
• Target what drives deficits. Don?t fix what isn?t broken.
• Restore fiscal responsibility, while investing in the future.
• Take the high road to fiscal balance.

In a conference call today with some of the signers, Campaign for America’s Future co-director Robert Borosage said the statement is:

a cry action on the economy?for a return to common sense.

In urging Washington to focus on bold initiatitves and massive job creation rather than deficit reduction, Borosage said the reason is simple: More unemployment will only reduce government income, which in turn will lead to a higher budget defict.

Robert Reich, former labor secretary, put it this way on today’s conference call:

Some people point to the fact that U.S. economy is tech growing?but what we learned is that it’s slowing.

Last quarter’s sorry 1.6 percent growth in gross domestic product (GDP):

should be a warning sign to everyone that we are not just in danger of a double dip recession, but that we are not getting out of the hole at all.

What you expect when an economy is getting out of the hole is rapid economic growth [because so many people are ready to jump into the production process]. But this time it’s not happening. This is a very dangerous sign.

Borosage says in contrast, the position of  House Minority Leader John Boehner, who says he and the Republicans will cut $100 billion from the budget if they get a majority in the House this November,

condem us to higher unemployment and continued stagnation.

With more than 26 million unemployed and underemployed U.S. workers, a dire need to rebuild the nation’s infrastructure and shore up vital socal services, Borosage said:

Anyone with a wit of business sense would grab this moment as the time to rebuild America.

Full post as published by AFL-CIO NOW BLOG on September 16, 2010 (boomark / email).