“Killing Us Softly”- Political Gridlock in Washington Dooms a Generation of Young Workers
Dr Mark Naison Fordham University
At a time when economists are talking about recovery, American political leaders have been making decisions which may doom a generation of young workers to economic hardship for the next ten years.
At a time when official unemployment is 9.7 percent, and private sector job growth has ground to a halt, the Congress of the United States, with only limited opposition from the Obama administration, has placed deficit reduction over job creation as a national priority.
The results are going to be devastating for a generation of young people graduating from college and professional school, along with those leaving high school, the military, or prisons without advanced degrees. At a time when banks are still writing off toxic assets and being extremely wary of extending credit , and cash rich corporations are putting their surplus into dividends rather than job creation, virtually the only economic growth has come from government expenditures and tax incentives, but now deficit conscious politicians are determined to cut those channels of economic stimulation off
Yesterdays news from the housing front dramatized that dynamic. Last month, sales of new homes dropped 33%, to the lowest level since 1981, thanks to the ending of a program of government tax credits to home buyers.
This collapse of home sales will not only have devastating effects on the construction industry, it will lead to a further freezing of credit, as second mortgages are one of the major ways Americans fuel consumption. Yet a budget conscious Congress refuses to extend the very tax credits that prompted a modest revival of the housing market.
And that’s only one part of a larger catastrophe. Last month, Congress refused to extend unemployment benefits to the long term unemployed, a decision that will put further strain on state budgets that are approaching bankruptcy in many portions of the country, and will give yet another hit to consumer spending
Worse yet, Congress is refusing to consider even a modest extension of the stimulus package which, in many economists eyes, prevented the economy from falling into a Depression and saved many states from economic collapse
As a result of this inaction, many states will be implementing draconian cuts in key government services including health care, transportation, and especially education. During the next two years, hundreds of thousands of teachers across the country will lose their jobs, making a mockery of educational reform efforts and destroying the dreams of idealistic young people across the country who hoped to make teaching their career.
Let us make no mistake about it. If current priorities don’t change, we are going to see massive job shredding in the public sector, along with virtually no job growth in the private sector, for the next five or ten years Not only is it going to be difficult to find jobs in law, finance and real estate, it is going to be equally difficult to find full time work in education and human services.
Young people are going to be leaving college and graduate school with huge debt and few economic prospects; and as they find work in fields which require less education, they are going to push out people who have weaker credentials The result is going to be shattered dreams, crowded households, families under stress, and an economy doomed to stagnation because people have little income and less confidence in the future.
Government alone has the power to break this impasse, through deficit spending, but our politicians have decided that deficits present a greater danger to the economy than high unemployment.
To me, that not only seems to deny the lessons of history, it represents an act of gratuitous cruelty to America’s youth.
Mark Naison June 24, 2010