While the following interview is imaginary, the bold quotes from Senator Cardin constitute, in order, the entire text of his statement on “Economy and Jobs” from his campaign website, www.bencardin.com. A screenshot of his position statement is at the bottom of this article for you to read, in its entirety, without interruption. Clicking on the image will make it larger.
Here are the opening paragraphs from the NBCNews.co website story on the just-released jobs numbers for August. Click on the image to make it larger. You can use the link to see the full article, or look around for any number of other reports. Keep in mind that NBC and other news services revise their stories, particularly soon after they are first posted, so the current text you see may differ slightly from the screen shot I’m showing below. The Bureau of Labor Statistics website has the original release.
The great American Middle Class is shrinking? Are we each, individually getting smaller? No, although there are some days lately when it feels like it. We’re losing income and wealth. While the precise definition of “Middle Class” is a bit fuzzy, what is clear is that this protracted recession is hurting everyone, some more than others, but everyone. And the effects for many of us are serious and long-lasting, the kind that take years, maybe even a generation or more, to reverse.
Ever wonder how it’s possible that stimulus spending has created so many jobs, and yet unemployment seems stuck above 8%? There are many reasons, of course, but one of the more obvious is that the President is overstating the number of jobs he claims to have created or saved.
The next time the President or anyone running for high office drops a big number, would someone please ask him or her, “How do you know?” It’s a simple, entirely reasonable question. “How do you know?”
The nerve of me. I’m nobody, and yet here I am telling you that monetary and fiscal policies, the traditional versions of them, don’t work. I might as well be telling you that prayer may make you feel like you’re doing something, but it doesn’t really accomplish anything, that any sense that it does is just wishful thinking and, in any case, impossible to prove. It is, of course, a flawed analogy, used only to make a point. The difference is that prayer is a matter of belief, while the efficacy of monetary and fiscal policy is science, social science, but science nonetheless. We don’t want elected officials who believe in the power of government. We want a President and legislators who understand the science of using government resources for the common good.
Fiscal policy is the use of government spending and taxation to influence the economy. Increases in government spending can create jobs that are needed to produce the goods and services the government buys, and then some through what are called “multiplier effects.” Reducing tax rates, to businesses and people, gives them more disposable income to spend. The more goods and services they buy, the more people that will be needed to make those things. That’s it in a nutshell.