As highlighted on this site today, Representative Joe Walsh, (R-IL), opined callously:
"We have so many people now dependent upon government. So many people want handouts. The Democratic Party promises groups of people everything. They want the Hispanic vote. They want the Hispanics to be dependent upon government, just like they got African Americans dependent upon government. That’s their game. Jesse Jackson would be out of work if they weren't dependent upon government. There’d be no work for him."
This has been the position of "compassionate" conservatives for many years — that Americans want handouts. This is an inconvenient lie because what Americans really want are jobs! Unfortunately, today's job report showed private sector employers added only 82,000 new positions, which is about half the number needed just to keep up with the natural growth of eligible workers. The monthly report also showed 49,000 fewer jobs created the previous two months.
Although we are some four years from the onset of the Great Recession, the fundamental question remains: should government pursue an agenda of austerity or increase spending under these troubling conditions? Opinions are ubiquitous.
The market provides the factual evidence for this question, ignoring pundits of any and all persuasion, and the answer is tiny, both historically and relatively, a small number: 1.48 — 1.48 percent, that is.
This figure, 1.48 percent, represents the current yield on the 10-year U.S. Treasury note. Contrary to Rep. Walsh's distorted statement, wealthy investors now appear dependent upon the American government, as their worries about a deepening debt crisis in Europe and sluggish job growth in the U.S. have them fleeing stocks for the safety of Uncle Sam's skirt.
Paul Krugman quoted John Maynard Keynes in his critique of "The Austerity Agenda," (NYT, 6.1.12). Keyes noted 75 years ago that, "The boom, not the slump, is the right time for austerity."
When President Obama championed government spending to the tune of some $800B in ARRA; when the Federal Reserve initiated both QE1 and QE2 programs, conservative "Henny Penny" alarmists screamed the sky would fall and the massive printing of money would result in rampant inflation that would engulf both the nation and world. They added government borrowing would squeeze available capital, force up interest rates, and starve small and large businesses of needed resources. Once again, small numbers provide the factual evidence to address these spurious claims. As of May 31st, the Commerce Department reduced their Q1 GDP estimate from 2.2 percent growth 1.9 percent.
We are clear today. Although ideologues (and Fox News) will continue distorting the facts, the world is awash in available capital — a supply so great that investors are willing to lock down their funds for ten years at a paltry 1.48 percent return. The market, the world's top investing experts, have determined conclusively they are not concerned about inflation — at least for ten years!
The economy is slowing; job creation is anemic. Market experts have confirmed the Great Recession is a "demand-driven" malady. Consumers remain on the sidelines generally. The high number of unemployed workers, not the amount of debt, serves to impede economic growth. Americans want jobs, not handouts. "Where's the beef?" they ask private sector employers.
Mr. Keynes gave us the answer nearly a century ago. Partisanship, not common sense, drives our failure today. Defeating Obama, not helping families, inspires conservative and Republican leader rhetoric.
Small numbers do not lie; small people do.