Inexcusable Republican Tactics Endanger the Economy
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The Fiscal Times
October 8, 2013

Why are the unemployed so invisible in Washington? Why has Congress all but forgotten about the millions and millions of people who want a job but cannot find one, not to mention all the people who have gotten so discouraged they’ve stopped looking for work altogether?

Democrats, who claim to represent the interests of the working class, have been relatively silent on the unemployment crisis. But Republicans in particular have been indifferent to the struggles of the working class during the recession and the far too slow recovery.

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One reason for the slow recovery is the cuts to government spending that Republicans insisted upon as they held the economy hostage in past negotiations with Democrats. Cutting spending at a time when the economy was struggling to recover made the unemployment problem even worse, and the hostage-taking tactic that was used created the economic policy uncertainty that Republicans claim to abhor when it’s convenient to their cause.

It also wasted valuable legislative time that could have been used to address other important problems, job creation foremost among them. If the Republicans had been willing, there almost certainly would have been a way to find common ground on infrastructure construction – an inherently supply-side policy that enhances future growth and also creates jobs – or even temporary tax incentives for businesses that would induce them to hire additional workers.

Republicans are at it again, this time with a government shutdown and the threat of hitting the debt ceiling that will make it even harder for the unemployed and put those who already have jobs at risk. The government shutdown itself won’t have that big of an impact on the economy, but if we hit the debt ceiling the economic consequences could be grim.

Federal spending will fall by a huge amount and create a large drag on an economy that is already struggling to return to full employment, and interest rates are likely to spike as we approach the debt limit causing large declines in business investment, housing markets, and the purchase of consumer durables. If it goes on for any length of time, we could easily end up in another recession.

How could any party put so many hard-working households at risk, especially after what they’ve just been through in the recession? And when you realize what this is really about – cutting social insurance so that taxes on the wealthy can be reduced – it’s even harder to understand. How could Republicans be so callous? And why haven’t we heard more from Democrats? Republicans are in a position to block any attempts to do more for the unemployed and the disadvantaged, but that doesn’t mean Democrats can’t make a political issue of it. Why haven’t Democrats complained loudly about Republicans standing in the way of helping the unemployed?

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One answer is that there is an empathy gap, that “Rich People Just Care Less.” This is based upon a “growing body of recent research showing that people with the most social power pay scant attention to those with little such power.” But while an empathy gap might explain why wealthy members of Congress from both parties have largely ignored the plight of the unemployed, it doesn’t explain why Republicans are attacking the social insurance programs that working class households rely upon.

Republicans believe that the haves in society – the makers – got that way through their own moral behavior, hard work, and sacrifice. They deserve to keep every penny that they earn. The have-nots – the takers – made poor choices, are lazy, and would prefer to sponge off the social insurance system than do hard work. The only way to get them to contribute to society is to create the correct incentives to work, and that means taking away government programs that might allow them to survive on the efforts of others. By reducing the scale of these programs – which just so happens to put more money in their pockets – they are actually helping the less fortunate avoid immoral choices that harm society. It’s a very convenient argument.

But most people who use these programs are hard-working and honorable. It’s always possible to find people who abuse a program and make a spectacle of them, and Republicans are good at doing just that. But the vast majority of people are using social services as they are intended to be used, to tide them through periods of misfortune.

The real immoral behavior can be found in the selfishness on display by Republicans – the willingness to put so many households at risk for what is, at its heart, an attempt to lower taxes on the wealthy by gutting essential social services their wealthy constituents don’t need. There’s just no excuse for the use of such potentially harmful political tactics, especially when there are ways to have the fight over taxes and social services that don’t involve taking the economy hostage and putting so many jobs at risk.

University of Oregon macroeconomist Mark Thoma writes primarily about monetary policy its effect on the economy. He has also worked on political business cycle models. Thoma blogs daily at Economist’s View.