Run Against Congress!

Even the conservative Chamber of Commerce blames Congress for the US's fiscal inaction! Ben Bernanke has said, many times, that the Fed is only doing what it can with monetary policy, because Congress isn't doing what it should with fiscal policy. So, the Fed puts forward Quantitative Easing, keeping interest rates at rock-bottom and shifting its portfolio from short to long-term assets to drive down the price of longer-term borrowing, as well as "printing" money. But everyone knows that isn't enough.

What is really needed, Bernanke implies, and Economist Paul Krugman has stated repeatedly, is government spending on stimuli, to enliven job markets, plus bring teachers, police, etc., back to work.

Congress is split; it is split between fiscal "hawks" and "doves(?)." The former, dominated by GOP Tea Partyers, claim, like a blindered former friend of mine, that "debt is debt," and The Government must stop borrowing at all costs.

The "doves" don't know what to do, because the conservative-led media has persuaded a near majority that government must cut spending NOW. But the costs really are tangible, and the GOP's solution--cut taxes on the so-called "job creators"--isn't going to create jobs, except maybe in China, only a larger deficit, probably more speculation with the extra money freed for the speculators, and draconian cuts to the programs that allow people to hang on by their fingernails, like Food Stamps.

Krugman agrees that once we are out of this recession/depression, the US will have to begin to pay down its overhanging debt, but now is not that time. Now, the US should borrow money; it's at historically low rates, because the US is the safe harbor for troubled money the world over. Now we should spend money to re-invigorate the economy: spend it on helping states re-hire their laid off workers, spend it on rebuilding and improving our shabby infrastructure and education and spend it on new ventures, like alternative energy industries, all of which will expand the tax base.

Some businesses are not hiring because no one knows what the deadlocked government will do. But why hire if there is no demand for goods and services, anyway? If demand were injected into the economy, companies would hire workers. The Fed can't cause that; only Congress and the President can.

But Republicans are vehemently opposed to any policy that would help Obama's reelection, and vehemently opposed to any further debt. Democrats, on the other hand, are timid, and too many of them are beholden to interests that want deadlock, or little government action--except on their behalf: the selfish class, I've called them.

That's where we stand today. We could go down the road to near-permanent Depression if we choose "austerity" and tax cuts for the wealthy. That's the direction the Roman Empire took in the 4th and 5th Centuries.

Obama should run against Congress, and for a huge new stimulus, instead.