Quick Action Needed to Restore Economy

As of Monday, August 23, 2010

Fifth of a Series

This is the fifth of a series in which Moore County’s Republican and Democratic party chairmen will address various political issues. Today's issue is the economy. Jim Heim is chairman of the Moore County Democratic Party. Robert M. Levy is chairman of the Moore County Republican Party. Click here for Levy's take on the issue.

America is in crisis. We are in the midst of the worst financial emergency since the Great Depression.

The only way out is to create millions of jobs to put Americans back to work. And the only way to create those jobs is to spur consumer demand. Yet the steps taken so far have been tentative and shown only meager effectiveness.

Our economy is based on consumers. More than 70 percent of our gross domestic product comes from consumer spending. Without it, our economy would collapse. Most of that spending comes from working Americans. As workers lose their jobs, consumer spending diminishes, rents and mortgages don't get paid, the problems mount, and the cycle repeats.

The jobs picture is bleaker than most realize. The currently unemployed are having a tough time finding that next job. As their period of unemployment - already much longer than ever recorded - drags out for months and years, their job skills fade and the task can become insurmountable.

Millions of formerly hard-working Americans may never find jobs. And some employers are trying to take advantage of the unemployed by offering jobs at dramatically reduced wages.

At present, one in six Americans is out of work. But the pain is not felt uniformly. Among college graduates, the rate is 5 percent, for high school grads it's 10 percent, for African-American men it's 18 percent, and for teenagers it's a whopping 26 percent.

That last number is troubling because it means that large numbers of young people are being deprived of the opportunity to develop a work ethic and job skills to build on for their future, productive years.

Faced with a crisis that threatens the country's very future, one would expect dramatic steps to be taken, but that's not happening.

In the 1930s, faced with a similar situation, the president and Congress worked aggressively to restore the economy and the jobs that went with it. But in those days Republicans and Democrats were willing to work together to save the nation.

Now we have Republicans who are willing to risk everything in hopes of shifting the blame away from their failed policies and to gain an electoral advantage. We have Blue Dog Democrats willing to help them, resulting in a paralysis at the worst time possible.

What can be done? First, allow the Bush tax cuts to expire on schedule at the end of the year for taxable incomes above $250,000. Those tax cuts have been a drag on the economy, returning only 29 cents on the dollar (according to Moody's). Enact a "payroll tax holiday" on the first $20,000 of income until unemployment rates come down, which would generate $1.29 in economic activity per dollar spent.

Unemployment benefits ($1.64 return) must be extended as needed, and food stamps (now called the Supplemental Nutrition Assistance Program, or SNAP) must be made more available; this returns $1.73. These latter efforts are the most efficient stimulus programs, as most of the money is immediately returned to the economy for family necessities.

State governments are facing $69 billion in shortfalls and need help to avert even more job losses.

We need a new WPA to put the unemployed back to work. It makes little sense to have millions of workers idle when the nation's infrastructure is in such disrepair.

We must address the issue of jobs being sent overseas. It is -difficult to compete with workers making a dollar an hour. Without carefully considered tariffs and other restrictions, our job -situation will worsen. And the Federal Reserve needs to remember its other mission; besides controlling inflation, the Fed is charged with encouraging full employment. It's time for it to get engaged.

Most important, the president needs to ignore the deficit hawks and act boldly. In 1936, FDR cut spending in the face of demands by Republicans frightened of deficits. It was the wrong thing to do, and unemployment went up, undoing much that had been accomplished, delaying the nation's recovery. We cannot make that mistake again.

If the government scales back its spending now, we will see rising unemployment and a return to recession next year. And it could get worse. Economists are worried that we're on the verge of a long deflationary period, which would feed on itself and make recovery even more difficult and costly. Putting Americans back to work is the only solution.

The Democratic Party is the party of working Americans. Since the Great Depression, every Democratic president (except for Carter) has seen a larger increase in GDP than every Republican president (except for Reagan). The stock market follows a similar pattern, as does employment.

More than 22 million jobs were created during Bill Clinton's two terms. George W. Bush saw only a million. Democratic emphasis on economic growth for the middle class enhances the living standards for Americans at every level.

We're in a deep hole and must let our elected representatives know that we expect prompt, serious measures to restore the economy. Both parties have a responsibility to do what must be done to put Americans back to work. America's future economic success depends on it.

Jim Heim is chairman of the Moore County Democratic Party. Contact him at democrat@heim.us.

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madstork 2 years, 9 months ago

The Dems hold Senate, House and Presidency. Blaming the minority seems a bit mis-directed.

Spending food stamp money and unemployment checks as a way to "stimulate" the economy made no sense when Pelosi said it, but Jim does carry the party water well.

Personal spending is not the engine...commercial spending is what drives the economy. Add in the elimination of excessive federal spending, and we might have a chance.

coffecreme 2 years, 9 months ago

@madstork Helms put forth his ideas whether you or I agree with them or not, What are your solutions?

JimHeim 2 years, 9 months ago

Apparently madstork and connor are unfamiliar with the senate's filibuster rule and the way that Republicans abuse it.

JimHeim 2 years, 9 months ago

Prometheus, I loved the WSJ chart. The title: "Bush On Jobs: The Worst Track Record On Record."

So let's recap. Bad old Bill Clinton with his bad old taxes, added 23.1 million jobs. GW Bush gets his tax cuts to spur the economy and adds 3 million, the worst per year job creation since records were kept.

You might tell me why this nation's best growth period was the 50's and 60's when the top tax rate was over 90%, and since taxes have been getting lowered, our growth has been much slower.

buddysmith 2 years, 9 months ago

everything is Bush's fault, Obummer said that during his last vacation in Texas!!!!!!!!!!!!!!I do support Obummer in all his vacations though, it would seem the less time he spends in Washington, the less screwed up things may become!!!!

JimHeim 2 years, 9 months ago

Prometheus, the difference in stats is that the one's I used counted only civilian employment. If you include the military (which WSJ may have, they didn't give a source), the numbers change somewhat. But not enough to give Republicans any edge.

Shall we compare the five Democrats with the five Republicans on your chart?

Democrats average 2,020,000 jobs per year and the Republicans average 829,600 per year. I like the Democrats record much better.

As for your need for a detailed plan, I have to rely on Barney Frank's admonition about arguing with a dining room table. My ideas are in the column. There is no point in repeating them here.

JimHeim 2 years, 9 months ago

Taxed2deth, If you look at government's effect on economic growth, a clear pattern emerges. The best growth is with a Democratic president & congress. Next is a Democratic president and Republican congress. Third is a Republican president with a Democratic congress, and worst, a Republican president and Republican congress.

That suggests that the party of the president is somewhat more important than the party of the congress.

dustyrhoades 2 years, 9 months ago

"George Maynard Keynes' ideas are in your column."

Would that be "JOHN Maynard Keynes", Braniac?

And how you have the incredible nerve to complain, as you so often do, about people substituting insults for reasoned debate while posting things like "a politician who ranks slightly below used car salesman and slightly above crack dealer" is a source of never ending amazement to me.

dustyrhoades 2 years, 9 months ago

connor: you can call a mound of BS a diamond all you want, but it doesn't make it so.

Ross 2 years, 9 months ago

hey - now that we have all the right wing haters in one place - lets...........

JimHeim 2 years, 9 months ago

This comment was removed by the site staff for violation of the usage agreement.

JimHeim 2 years, 9 months ago

Prometheus, I continue to wait for you to make a reasoned objection to any of my points. Just putting your fingers in your ears and going, "Na na na na," won't do it.

Tell me how Bush got his "economy revving" tax cuts and watched as the nations' economy tanked. Are you sure that was how it should work?

madstork 2 years, 9 months ago

I can understand why Mr. Heim is so passionate about the democratic platform. It has been very good to him. Lives on a horse farm according to an earlier article and, just recently he blogged that he has received wonderful healthcare through the VA as his wife is a retired military doctor. Nice work if you can get it.

dustyrhoades 2 years, 9 months ago

Madstork, if anyone had said those things about a Republican, you and your fellow wingnuts would be screaming about class warfare, hating people who are successful, and hating the military.

You people have no principles at all.

JimHeim 2 years, 9 months ago

Prometheus, I take it from your response that your side has no plan aside from preventing President Obama and the congress from doing what needs to be done. And you have no specific complaints about my proposals.

I was quite specific in my column. The solution (and there is but one) is to encourage consumption. I made a number of proposals to do just that. the column stands on its own.

JimHeim 2 years, 9 months ago

Prometheus, my last 401(k) cratered in 2008, before the election.

Ross 2 years, 9 months ago

Prometheus - "Go outside and play, little boy - the grown-ups are trying to talk...."

nah - you are simply being a major contributor to global warming!

someone should put a timer on you!

madstork 2 years, 9 months ago

Dusty, I started out w/ little, went to college on scholarship, served in ROTC, drafted to Vietnam, raised a family, help support my parents in their senior years and have worked 70 hour weeks to amass some wealth. Yes, I am one of THOSE 250K+ evildoers. Please..Spare me the lecture on principles. The comments I made are public record. Mr. Heim has stated them in the pilot. You two are quite the spectacle.

JimHeim 2 years, 9 months ago

connor, what I like about debating conservatives is your classy behavior.

madstork 2 years, 9 months ago

"connor, what I like about debating conservatives is your classy behavior." - Jim Heim

"Just putting your fingers in your ears and going, "Na na na na," won't do it." - Jim Heim

connor, this is the "classy" bar Mr. Heim has set. I think we need to stoop down to reach it though...

moonchild7 2 years, 9 months ago

Just exactly how is our banker-based economy going to work? It's like playing the monoply game, you know you can't win if you don't get to be the banker because whoever gets to be the banker they always seem to win. The banks are holding onto the money now after their credit-card psyche-out floundered. Since 9/11, maybe even a bit before the U.S. consumer's were encouraged to buy now and pay later. That mentality has been around for a while but that mentality was put on a huge dose of steroids and the U.S. consumer started buying an unbelievable amount of junk. Useless junk. I witnessed it when I'd be out with girlfriends shopping and they'd ask me why I wasn't buying this or that like they were and I'd tell them because that is not something that is good or useful. Of course they also pulled out the credit card to buy it. A few of those friends have since declared bankruptcy. Fake money equals fake economy. No matter who the President is, the U.S. economy will have difficulty recovering.

We need to NOW focus on an economy that promotes well-being. Goods and Services that help us with our health, and climate. My father took me to the NY Worlds Fair in 1963(I was 10). The "future" looked healthy, energy efficent, and worth living. What happened? My personal opinion is that the Oil and Gas Company's saw "the future" and didn't like it. They have made sure ever since that they and the banks stay in control. The government has oddly NOT done enough to keep that from happening.

We need to create Goods and Services WORTH consuming.

teufelhunden 2 years, 9 months ago

Prometheus-"The economy could be in the early stages of this economic boom cycle IF - and it's a HUUUUGE "IF" - if the government truly wanted the economy to improve."

This statement speaks volumes. I have always thought that the "powers that be" manipulate things to serve/support their agenda. If we only knew just how far they'd go to ensure favorable outcomes for themselves. You know, they never let a good disaster go to waste...

Arestorer 2 years, 9 months ago

We need to regain our production of goods. We cant survive making cars and consumers. Stop out-sourcing all our jobs.

teufelhunden 2 years, 9 months ago

So true, Prometheus, so true. It's all so painfully obvious what's going on here. I'd like to hear about the plan too.

Arestorer 2 years, 9 months ago

How about at least lets produce our clothing again, Tax or Tarrif Importers so their product is not cheeper to import than paying Americans a fair wage to make here. We need to have a few Patriotic buisness owners to STEP UP.

Arestorer 2 years, 9 months ago

Does anyone else think our exported jobs are why we dont have any.

Arestorer 2 years, 9 months ago

?????????????????

Arestorer 2 years, 9 months ago

I dont know who's plan it is,but it wont solve our main problem of jobs,just make more jobs for foreign intrest and bankers.

blake 2 years, 9 months ago

Mr Heim writes "The solution (and there is but one) is to encourage consumption." That is awfully shortsighted and is the primary cause of our current predicament. I encourage you to read an article by Paul Volcker from 2005 predicting our current mess. http://www.washingtonpost.com/wp-dyn/articles/A38725-2005Apr8.html He writes"The difficulty is that this seemingly comfortable pattern can't go on indefinitely. I don't know of any country that has managed to consume and invest 6 percent more than it produces for long." "What I am talking about really boils down to the oldest lesson of economic policy: a strong sense of monetary and fiscal discipline. This is not a time for ideological intransigence and partisan posturing on the budget at the expense of the deficit rising still higher."

JimHeim 2 years, 9 months ago

blake, I'm not fan of a consumer-based economy but it's the one we have. Anyone with a workable plan to shift us to an alternative that includes the conditions for a vigorous middle class is welcome to share it.

moonchild7 2 years, 9 months ago

The economic condition of Americans was the BEST it's ever been in our entire history after Bill Clinton became President. Why? His Administration's idea's put more investment in education, health care, science and technology, they cut taxes for the MIDDLE CLASS, RAISED the minimum wage, and enacted the 1993 deficit reduction plan WITHOUT ONE Republican vote! Can we please send those guys somewhere else? There were 10 million who were unemployed when he took office. Over 22 million NEW jobs were created! Now, tell me SIMPLY what do you think happened? And don't say 9/11. George Walker Bush sadly happened. What a travesty....Bush v. Gore happened and the outcome was NOT pretty. George W. Bush was an incompetent oily puppet man.

The other thing that happened was the UNMITIGATED GREED factor on a scale also never seen before. I saw people buying things they had no business buying. Some of them were "flipping" houses at astonishing rates. They were buying Mercedes, BMW's, ranches, overpriced/shoddy designer duds, very expensive jewelry, overpriced unneeded weddings(I admit I got to go to one and it was outrageous), cruise's, exotic travel, bigger boobs, on and on and on. No one was saving and the word, "NO" did not exhist. People were charging on credit cards with absolutely NO money to their names! It was YES" and more "YES" on a 24/7 schedule. GREED has CONSEQUENCES.

George kept telling everyone to shop, then he went to bed early. The end did finally come and here we are. More than likely there will be a time now of deflation, de-sizing, de-living, de-boobing, de-eating, de-cruising. etc. So, ironically I will say because of my CONSERVATIVE handling of my finances, and life I'm planning my first European vacation. For the first time I can now afford the trip and also have the well deserved time to take it. It's been nice to be able to "retire" this young in life. I'll say it again, at times I worked harder then men and I used my "smarts" to NOT be taken in by the shysters that were proweling around everywhere. Thank You Great Spirit in the SKY. Peace&Love. Peace&Love.

moonchild7 2 years, 9 months ago

Prometheus, how could George W. been responsible for the longest period of economic expansion ever when the biggest part of it was FAKE! The Dot-Com bust was at least the HINT that things might not be quite right. Myself, I never could figure out how multi millionaires were proliferating in the computer world while at the same time what was being prolifterated was thin air. Problem also was that nobody took notice(including Democrats)and kept that party going. The Republicans with a handful of Democrats then decided to EXCELERATE the fun and loosened the ties that somewhat bound Wall Street's feet to the floor. Then they brought in some guys from MIT and HARVARD and walla, CREDIT DEFAULT SWAPS. Brainiacs at their best.

Perhaps the biggest signs to me that something was drastically drastically wrong was when I'd visit relatives in the Northeast. Some of them lived in nice but very moderate neighborhoods. A few lived in extremely nice neighborhoods but the changes I saw in those moderate ones were the ones that made me concerned. Thru the late 90's and especially the last 10 yrs on almost every visit, houses were being torn down. McMansions were going up...on very small lots! Everywhere. I admit I was a little too nosey but on one visit a couple of us "sneaked' over to look in the windows of the newly occupied(they weren't home)$1.2 million dollar house built next door. There was either no furniture or Big Lot cheap imported furniture in the rooms. These new very expensive homes were being built in neighborhoods that came about after WWII. My relatives paid about $20,000 for their homes back in the '60's. It was close knit for a very long time and then America said to itself, "Let's go for the gusto!" Let's go for touchdown!"....No matter what the cost or what the price. Now the neighborhood has empty lots with huge dirt holes everywhere. Now the neighborhood has For Sale signs everywhere. Now the stores are closing up evertwhere. The Future is Now.

moonchild7 2 years, 9 months ago

What does that mean? Is the US economy flourshing or not flourishing? Tell me your great and all inspiring take on the subject.

moonchild7 2 years, 9 months ago

That last comment of mine was to Flactem. And Prometheus, you too are right about a lot of that except that the reality is that WE ARE THE GOVERNMENT. Like it or not and the failures come from the people not exercising either their right to vote or their right for a redress of grievances. The massive lies that are expressed by both the government and the capitalist pig machine by pointing their fingers at each other works well on a dumbed down, fearful, stressed-out populace. The goverment CAN fix the economy because they can both destroy or create with the swoosh of a pen. They can call the Army in or they can withdraw them back to base. I'm going to be okay and try to still stay positive for resolutions of whatever sort to turn things around. Hillary Clinton was my absolute choice for her to become the first woman President and I think she would have been better at the job. But, I support The Democratic platform and NOT anything the Republicans now have to offer. I'm going to try to NOT worry or be fearful unless the Billionaire's decide to start buliding their own Army. Then it's time to worry.

JimHeim 2 years, 9 months ago

Thomas Jefferson was quite the opponent of handing off debt to succeeding generations ... except when he wasn't. Anybody remember where he got the $15,000,000 for the Louisiana Purchase?

moonchild7 2 years, 9 months ago

Again you are wrong Comrad. As long as we have our liberties we ARE the government(Not so sure about Arizona though after giving John McCain another chance). Once those liberties are taken away then we are mindless pawns that the GOVERNMENT can do with as they please. Guess what? I think if you don't like something then you can vote the other way, write a letter, peacefully protest in the streets, move to an island or even become violent. Last time I looked it was still possible to do those things.

Adolf Hitler did NOT become a brutal Dictator thru democratic elections. He never could get more than 30% of the vote. After several elections his Nazi party began to use street chaos, murder and "dirty tricks". Seems they(Nazi's) got this Communist guy to set fire to the Reichstag and put President Hindenburg into the terrible position of having to "appoint" Hitler as Chancellor to quell the violence(that Hitler was creating). That Communist guy was later killed. The Reichstag(government)voted and Hitler became DICTATOR. "The people of Germany" lost sight of everything and let it happen because they were scared and hungry. The non-jewish Germans didn't care after that and did nothing even though they lost all of their rights when the Reichstag(Congress)voted to suspend their constitutional guarantees of civil liberties. The Jews became targets for Hitlers hateful beliefs and the German people just looked down.

If the "Haves" are so upset about being taxed to death because they are needed to help care for the "Have-Nots", instead of protesting tax rates, why don't they do more to help create a better way that those "disgusting bums"(as they are most often referred to as by the right) can become more self-reliant. Mentoring is never a bad thing.

redhawk 2 years, 9 months ago

The leaders making economic policies are all academics and politicians. There is no practical business experience making decisions. No one has held a job, owned a company or made a payroll in the private sector. No wonder the country is in this economic mess. But a change is coming and hopefully the Dems don't do too much more damage with their failed policies.

teufelhunden 2 years, 9 months ago

Redhawk - you are so right.

moonchild7 2 years, 9 months ago

These are quotes from our 35th President of the United States of America. *****John F. Kennedy****

"Economic growth without social progress lets the great majority of the people remain in poverty, while a privileged few reap the benefits of rising abundance."

"If a free society cannot help the many who are poor, it cannot save the few who are rich."

"We have all made mistakes. But Dante tells us that divine justice weighs the sins of the cold-blooded and the sins of the warm-hearted on different scales. Better the occassional faults of a party living in the spirit of charity then the consistent omissions of a party frozen in the ice of it's own indifference."

"Conformity is the jailer of freedom and the enemy of growth."

"Liberty without learning is always in peril and learning without liberty is always in vain"

moonchild7 2 years, 9 months ago

'The problem of power is how to achieve it's responsible use rather than it's irresponsible and indulgent use, of how to get men of power to live for the public rather than off the public".

"I believe that as long as there is plenty, poverty is evil".

"Don't get mad, get even".

"There are those that look at things the way they are and ask why, I dream of things that never were and ask why not"?

*********Robert F. Kennedy

Does he count? I was in the 9th grade when he was assasinated. School in D.C. was canceled for the next few days.

And one more thing, JFK lowered the tax rate for the wealthy from 91% to 71% and for the "lower incomes" from 20% to 16%. Today the rates for the wealthy are 35% and for the "lower incomes" 10%. There's a whole lotta money making goin' on somewhere in these United States. Just where is all that "re-investment" that was supposed to follow Bush's tax cut plan? Is it at all possible that we are now reaping an extensive HELL from what the wealthy FAILED to sow?

moonchild7 2 years, 9 months ago

People have to put themselves back to work. Problem is they've been sold such a bill of goods about what they need to be doing to be a "happy and succesful" person they just aren't able to comprehend the concept of less might be more. The materialistic psyhco-babble that continues to proliferate from every crevice of our current society is disheartening. What's more disheartening is the amount of people who continue to buy into it.

We should have moved so far away from the Oil and Gas Energy Co.'s stranglehold on our ecomomy by now. The solar and wind initiative's are a joke. Also where are the competing alternative fueled car company's that have been "experimented" with for the past 50 yrs at? Why has it been that the "experimented" car never is quite right?

Sometimes you just can't sit and wait for the jobs to come to you.....you have to go out there and get them or start them up. My son started up his own small business during college. Full time school....almost full time company. While his friends were out partying he was makin' money. He paid off all of his college loans and paid in cash for his Master's degree. I thought it cost him about $25,000 but yesterday on the phone he told me with books and fees it was more like $29,000. Some of his college buddy's are back at home with Mom and Dad. I really love it here but I don't want him to have to come back. What ever happened to raw ambition?

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