Rep. Greg Walden: Debt and deficits only slow economic recovery

by Rep. Greg Walden

Here is yet another reason why the coming election is so important: The average number of weeks for a job seeker to find employment has skyrocketed over the last three years, as you can see from the chart below. In April 2012, unemployed Americans waited on average 39.1 weeks before landing employment.

Of course, ebbs and flows in the economy and the job market are natural. But the average length of time it takes an unemployed worker to find a job is at heights unseen since the Bureau of Labor Statistics started tracking that data in 1948. Prior to the great recession, the record high was 21.2 weeks, set in July 1983. That mark was broken in April 2009, and we’ve been above it for 37 straight months.

We find ourselves at levels today that would have been literally off the charts three years ago.

Obviously, the only way to turn this around is to create more jobs and opportunities for small businesses to grow and invest. Unfortunately, the President’s budget promises more of the same. The latest economic analysis from the non-partisan Congressional Budget Office says that his plan for more debt and more deficits will only slow down the economic recovery even further.

“For the 2018-2022 period, CBO estimates that the President’s proposals would reduce real output, on average, by between 0.5 percent and 2.2 percent compared with what would occur under current law,” according to their report.

It’s time for government to tighten its belt and balance its budget just like families and small businesses do every month. We can’t afford more of the same. If you need proof of that, just look once more at the charts above.

To visit Congressmen Walden’s web site, click here

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  • Bob Clark

    Why do federal government spending agency heads instead run around the country throwing billions of dollars away on low efficiency projects like Milwaukee-Portland light rail?  It’s an utter waste, which requires further government subsidies after the line is built inorder to fight associated crime and to entice folks to actually subcumb to living around it.

    If these rail systems were actually fast and high capacity like underground or overhead subways that would be one thing; but these light rail systems are not even close to fast and high capacity.  They are slow and meandering and clog urban areas with rail blight.  Places like Portland Metropolitan area lend themselves more efficiently to individual transport modes or buses.

    So, when the House of Representativies actually cuts off the light rail and street car boondoggles, then, maybe we can start to take talk of fiscal prudence at the federal government level more seriously. 

    • David from Mill City

       In our current economic situation “fiscal prudence at the federal government level” at best retards our national economic recovery and in the worse case puts us into a National Depression.

    • JoelinPDX

      Yeah Bob, you need to be more like David from Mill City and depend on the government for your income.

      • David from Mill City

         

        Not depend on the
        Government for a living. Depend on the employer of last resort the Federal Government
        to get our economy back on its feet by putting people to work directly and
        indirectly building the national infrastructure we as a nation will need to be competitive
        in the 21st century.

  • David from Mill City

     

    The real problem with the American economy is a lack of Consumer
    Demand.  In a consumer based economy like
    ours it is consumer purchasing or the lack there of that determines how well
    the economy does.  American workers and their
    families are America’s consumers, and the source of Consumer Demand. Because people
    without jobs or in fear of losing their jobs do not consume at the levels necessary
    to drive our economy at normal levels, America is in an economic crises.  

    It is not the National Debt or rising deficits that is at
    the root of our current economic situation it is a lack of Consumer Demand. In
    fact as the situation in the United Kingdom shows efforts to reduce deficits
    only makes the situation worse, since Government Workers and the workers
    supplying goods and services to governments are consumers. So all these austerity
    measures due is reduce the all ready low levels of consumer demand making the
    national economy worse.

    This is not to say that continued deficit spending and a
    rising National Debit are not a problem, for they are. But rather that they are
    not the root of our current economic woes nor are they problems that we must
    deal with now.

    Which brings us to the question of how do you create
    Consumer Demand?  You get America back to
    work. That is simple to say but very difficult to do. Because a prudently
    managed private business does not hire new workers unless it is reasonably sure
    that there is a market for the goods and services that the new workers produce,
    and the consumer demand for the those goods and services does not exist because
    a too large portion of the American Workforce lacks a job, it is clear that we cannot
    depend on the private sector to get us out of our current economic mess. And
    the Republican solution of tax cuts and eliminating necessary regulations do not
    work for they only increase the profits on existing production and do not create
    increased Consumer Demand. 

    Only the Federal Government is in the position to cause an increase
    in Consumer Demand. There are two ways it can do so; it can give cash directly to
    the American Public so they can buy things thus increasing Consumer Demand or
    the government can spend money buying or building things, putting Americans to
    work so they have the money to buy things thus increasing Consumer Demand.

    • GretaN

       “…give cash directly to the American Public” – you mean by not TAXING US INTO OBLIVION and/or returning our hard-earned money to US???

      • valley dude

        No greta, he means by temporary deficit spending until the private sector economy recovers enough to put all who want to work back to work.

      • David Appell

        Taxing us into oblivion?? In fact, government receipts are at their lowest level in decades. 

    • JoelinPDX

      Obviously this is the reason Obozo’s stimulus plan has worked out so well. 

      The real unemployment of 14.1 percent, admitted by Obozo’s BLS and these charts provided by Congressman Walden prove the point,..The government cannot buy us out of our economic malaise. 

      What will get the economy back on track is employment and that means lower taxes for small business.Obozo’s idea of higher taxes on anyone with an income above 250k will not create lower taxes for most small business.

      • David from Mill City

         

        It is Consumer Demand that creates Jobs. It takes either people
        with jobs spending money or Federal Government Spending to create Consumer
        Demand. Or to put it another way, Tax cuts do not create jobs. Tax cuts either
        create more debt or destroys jobs.

        • Ardbeg

          This is exactly what Joelina will never get. Conservatives seem to think if you reduce taxes on small business that every thing will be just peachy.  What Joelina and others don’t get is if you could reduce taxes on small businesses to zero that that does not make them immediately successful.  No business will succeed no matter what their location, no matter what their product, no matter what their business plan is, unless there are consumers with enough extra cash in their pockets to patronize their establishment. Conservatives don’t get our economy is a “consumer” based economy and without a middle class-no business growth.

  • valley dude

    Obviously Mr Walden flunked econ 101. When you have a financial panic, followed by a decline in private sector demand, followed by massive unemployment, and when zero interest rates fail to turn things around, deficit spending is pretty much the only tool available to turn things around.

    Try talking to an economist.

    • JoelinPDX

      Another misdirected vote in favor of Obozo’s stimulus plan. Have you noticed VD that it hasn’t worked?

      • David from Mill City

         

        Obama’s Stimulus
        did work just not as well as hoped. Partly because our economy was in a bigger
        hole then they thought and because the tax cuts the Republicans insisted on did
        not produce an appreciable number of jobs but mainly because it was much too
        small.

      • valley dude

         We have had 11 straight quarters of economic growth. The first of those quarters was shortly after the stimulus went into effect. It takes a while to dig all the way out of a deep hole.

    • David Appell

      Good point, VD. We’ve seen what a disaster austerity has been in Europe, which could have been the fate of the US had there been no stimulus. It ($800 B) was too small, but better than nothing. If only it’d been what many top economists were calling for (3 times larger), the US economy might be back at its potential, but Republicans would have none of that. It makes you wonder whose side they’re really on.

      • valley dude

         They are on their side, and their side needs the economy to suck so they can regain power and go right back to the same policies that got us to 2008.

  • David Appell

    “Tax relief is central to my plan to encourage economic growth, and we can proceed with tax relief without fear of budget deficits, even if the economy softens.” – George W Bush, speech at Western Michigan University, 3/27/01 “And after we fund important priorities in the ongoing operations of our Government, I believe we ought to pay down national debt. And so my budget pays down a record $2 trillion in debt over the next 10 years.” – George W Bush, speech to the American College of Cardiology, 3/21/01Increase in debt when Bush left office, compared to his 3/21/01 remarks: $4.9 trillion higher 

    • JoelinPDX

      David, we all know it was Bush’s fault…Obozo’s been telling us for three years.

  • HBguy

    So, Rep. Walden is advocating that we not change current laws. So he says we’re better off if the Bush tax cuts go away for everyone, capital gains and dividend taxes go up. The estate tax goes back to a unified credit from 3.5 million tax exempt to $675,000 tax exempt. THe payroll tax holiday goes away. Because those are current laws.

    Yes, O’Bama wants to cut taxes as compared to current law. That does result in more stimulus and growth in the short term, and larger debt in the longer term.

  • David Appell

    It’s time for government to tighten its belt and balance its budget just like families and small businesses do every month.

    Governments aren’t families! Or a business. 

    Is the paradox of thrift really so hard to understand? Walden went to the U of O — don’t they teach basic economics there?

  • Riply

    Piling up more debt so that “the government can spend money buying or building things, putting Americans to work so they have the money to buy things thus increasing Consumer Demand.”is a suicide pact. Not a recovery plan. Austerity is unavoidable and inevitable. Delaying it will only make it more painful. Europe has no out but sweeping austerity.   Calling increased government debt spending the only tool is a perfect fit for you two global warming lunatics.  You are simply too dumb for words. If the stimulus had been “3 times larger” like Krugman loons wanted they would still be saying the same thing. Bigger Bigger.The government cannot borrow and spend our way out of recession.If that was workable they should just give large tax holidays instead of politically picking winners and losers. 

    But what you are proposing is really trickle down isn’t it?

    Give billion more in stimulus to union industries and it’ll trickle down to everyone?
    The select few entities who get the big stimulus handouts are never going to float the other boats.  

    • David Appell

      In fact, the US government has already spent us out of recession, though it could have been better. Without it, it would have been a lot worse (ask the UK, or Ireland, or any of several other European countries).

      There is a time for austerity, and this isn’t it. There *was* such a time — 2002, when Bush inherited a surplus and the relatively weak 2001 recession was over. But instead of paying down the debt — as he said he would — Bush decided “it’s the people’s money” and proceeded to give it to rich people. He then fought two unfunded wars and enacted a large new addition to Medicare, all while cutting taxes *again* for the wealthy. 

      Bush absolutely pulverized the federal budget and the economy, and cleaning it up will take a decade. He was an unmitigated disaster — no wonder no Republican will now speak his name. 

    • David from Mill City

       

      As the economic situation
      in the United Kingdom shows it is Austerity Programs that are the suicide pact.
      Austerity kills jobs it does not create them.  

       

      After the Economy
      is fully functioning again and not before is when we should deal with the
      National Debt.

    • valley dude

       We have been running a real time experiment. Those countries that opted for austerity: Britain, Ireland, Spain, Portugal, and Greece, have shrinking economies and rising unemployment. Those that opted for temporary larger deficit spending have growing economies and declining unemployment: China, the US, and Australia.

      The government can indeed borrow and spend its way out of a recession. We have done it many times int he past.

  • cyh045

    the stimulus did not work because so much was used to pay political favors, that Obama owed. and the state use it to catch up on back payment owed to vendors,etc. so that money did no recirculate to the economy. and the next problem the Government has is: one example ( USPS lost 27 billion dollars last year, and the post master general get’s a bonus of 7 million dollars, no private company operate like this. the federal government, the state governments, and local government need to be audited and an efficiency expert and time management person need to go through item line by line and cut the cost of government by 50%. and why does Obama have 30+ czars on federal payroll? why does Michelle Obama have 20+ personnel assistants? on government payroll?

    • David Appell

      No private companies operate like this? Perhaps you can enlighten us on the Wall Street firms — “capitalists” — insisting on paying bonuses less than 2 years after being bailed out by taxpayers…. 

      • cyh045

        First off I feel it was a big mistake for any private company to get a bailout.I am a believer that if a company can’t make a go of it then the go bankrupt, no company is to big to fail. and to have the taxpayers bailout any company, the economy will survive if a big company goes bankrupt, and there will be other companies, taking up where the bankrupt company could not. wall street firms that got bailout should have been shut down. and sold to the highest bidder or bidders. I think the Bush administration panic and did not wait to see all the solutions. and Obama has just followed the trend, instead of putting a stop to the insanity. Government and business should be kept separate, government should only over see regulation of the business world, and government and business got mixed up because of greedy business people and greedy government employee. the government has never address this problem even after they bailout these wall street firms.

        • David Appell

          Yes, but lots of Wall Street companies *DID* get bailed out. So it’s a bit late to say it shouldn’t have happened, or not to ask what would have happened if they *hadn’t* been bailed out. 

          The Bush administration painted the situation as the entire economy being on the verge of near-immediate collapsing, and if that was true then just standing by and letting it happen would have been the height of responsibility. If it was true then there was definitely a role for government, just as there is a role for government now. 

          People like you are going to bitch and whine no matter what, without much thinking put behind it, and be distracted by how many assistants the First Lady has or wild claims about fictional bonuses received by the head of the USPS. 

          In fact, the people pulling the strings are *counting* on you being distracted like this.

    • David Appell

      Actually, Michelle Obama has about the same number of assistants as Laura Bush, according to Fox News’ Bill O’Reilly:

      https://www.foxnews.com/on-air/oreilly/transcript/bill-oreilly-separating-fact-myth-regarding-president-obama

      • cyh045

        Still to many?

        • David Appell

          Maybe; maybe not. But irrelevant to the issue of deficit spending. 

    • David Appell

      Actually the USPS lost $5.1B last year, not $27B:
      https://about.usps.com/news/national-releases/2011/pr11_124.htm

      That’s twice now you’ve been wrong on basic facts, which puts you in the category of “ignore in the future”.

    • David Appell

      And according to CNN, the USPS chief made $384,000 last year:
      https://money.cnn.com/2012/03/02/news/economy/postal_chief_pay/index.htm

      You’re clearly the kind of person who believes whatever he hears that confirms his biases, without thinking for himself.

      • cyh045

        I heard that on fox new, I don’t research everything I hear. i don’t have that kind of time. CNN does not say anything about bonus.

        • Newsman

          CNN rules!!!

        • David Appell

          “I don’t research everything I hear.”

          Spoken like a true Fox News viewer. 

          • cyh045

            I don’t watch fox news any more. they have gone as liberal as CNN, You can’t trust any news media anymore. they slant the news for there own bias. I can’t change history by wasting my time with you or news. you can say anything you want about me you don’t even know me. you are way to smart for me so why waste your time on me. argue with someone more intelligent than me.

          • David Appell

            In fact, I already know you quite well — your writing skills are poor, and your thinking skills aren’t much better. That’s the picture you’ve presented from the outset. 

          • cyh045

            you don’t know me.I made up those numbers and crap to suck people like you in. and waste your time. it worked, and prove my point.

          • David Appell

            I don’t believe you. (At this point your credibility is gone.)

            But you have proven yourself to be a waste of time. What’s saddest, though, is that you seem to be proud of that. 

          • cyh045

            you were sucked in . and you are to proud to admit it. you are a liberal idiot

  • Railking

    How dare you criticize light rail. Without it, I could not travel freely about the city for free.

    • Railking

      I’m sorry again.  I keep doing this.  I say stupid things that I know don’t mean anything, but I can’t stop myself. Please don’t judge me.  I need help.  I cry out for attention and everyone ignores me. Please pity me.  I’m doing the best I can on a 3rd grade education.  Please.

  • Rupert in Springfield

    The point here is government spending needs to be looked at. Government spending can boost an economy, it just has a poor track record of doing so. the New Deal and its lack of success for over a decade would be evidence of this. The BO stimulus plan and its failure to deliver as promised being another good examples.

    Tax cuts can also boost an economy and though they have a non certain record of doing so, it is more certain than government spending. The Kennedy, Reagan and Bush 2 post 9/11 tax cuts being examples.

    The thing to do now is look at how government is spending. Green Welfare programs didn’t pan out. OK, time to cut back on those. Two years of unemployment? Might be time to take a look at that.

    As for Europe, it remains to be seen. Yes austerity did not get them out of the recession, but the BO stimulus plan only resulted in higher unemployment here. Austerity does have one up side, even if it does not provide jobs, it does provide a sounder financial footing for the future. BO could take a lesson from that instead of roping us into more expensive entitlements which we cannot afford and will only make the long term picture more bleak.

    Disclaimer:

    Looking at cutting back on unemployment means I hate the unemployed.

    Getting rid of green welfare programs means I hate the planet.

    Being against expanding entitlements = I hate children and eat old people.

    • David Appell

      In fact, the New Deal was working — by 1937, the economy was in solid recovery, with profits and wages back to their 1929 level. Then the federal government cut back on spending and the economy tanked again, only to finally recover by the giant stimulus package known as World War 2. 

    • David Appell

      The BO stimulus plan and its failure to deliver as promised being another good examples.Even though it was too low by what many said was a factor of about 3, the stimulus pulled the US out of recession, and has kept it out. And it was crafted before revised GDP numbers revealed just how monstrous the Bush Depression was: 3Q08 -3.7%4Q08 -8.9%1Q09 -6.7%2Q09 -0.7%
      Had the true picture been known, an even larger stimulus could have been designed — not that the Republicans would have been likely to approve it. It’s difficult to understand what they were thinking about. It clearly wasn’t the health of America.

    • David Appell

      Tax cuts do not necessarily boost an economy.

      Time Magazine, 12/6/07: “Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves–and were never intended to. Harvard professor Greg Mankiw, chairman of Bush’s Council of Economic Advisers from 2003 to 2005, even devotes a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.”https://www.time.com/time/magazine/article/0,9171,1692027,00.html#ixzz1KSEvg2oG

    • David Appell

      “The Bush tax cuts were followed by low GDP growth, negative median wage growth, and little job growth. Even before the Great Recession, growth in the Bush business cycle was the weakest since World War II. And the cuts cost about $2.6 trillion between 2001 and 2010, according to the Economic Policy Institute—adding to a debt future generations of taxpayers will pay for, plus interest.
      “By Bush’s own metrics, then, the tax cuts were a failure.”

      – Annie Lowrey, Slate 6/8/11https://www.slate.com/id/2296578

    • David Appell

      …the BO stimulus plan only resulted in higher unemployment here.

      False. In fact, according to Congressional Budget Office estimates, the stimulus’s effect on employment in 2010 was at least 1.3 million net new jobs, and perhaps as many as 3.3 million. See

      “The GOP Myth of ‘Job-Killing’ Spending”
      – Alan Blinder, Wall Street Journal, 6/21/11
      https://online.wsj.com/article/SB10001424052702303635604576392023187860688.html

    • David Appell

      As for Europe, it remains to be seen.

      That’s an absurd statement, completely divorced from reality. Nothing remains to be seen — austerity in Europe has been an unmitigated disaster, for the UK, for Greece, for Spain and Italy, for Ireland…. 

      Anyone who thinks the effectiveness of austerity in Europe “remains to be seen” is simply unable to evaluate evidence (or understand theory). 

    • David Appell

      Green Welfare programs didn’t pan out.

      Proof? Evidence? Data? Documentation? Substantiation? 

  • Britt Storkson

    Greg Walden is part of the problem – not part of the solution.  He voted to borrow $1.5 Trillion from the Chinese and God knows whom to continue to feed a bloated, dysfunctional government.  No changes or reforms in the way government does business, of course.  Just throwing more money at government. 

    Walden votes for more deficit spending then, a few months later, stands up and condemns that very practice.  What hypocrisy! 

    • guest

       B—- S——–! Your rumination looks likes Jeremy “Zits” – only piled higher and deeper you Demablog!

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