A decade ago, a generation of Republicans swept into office on the heels of the Great Recession, preaching austerity over bolstering state budgets or extending unemployment benefits, hoping to pin the slow crawl toward recovery on Democrats. And they now seem poised do it all over again, potentially leaving Americans even further in the dust.
We saw the groundwork for that shift being laid last week when a GOP strategist told Bloomberg News that Republican senators are using the price tag for more coronavirus relief — which would include things like extended unemployment benefits and funding for small businesses — to prepare voters for a game plan during a Biden administration. In other words, "it would be very hard politically to agree on spending trillions more now and then in January suddenly embrace fiscal restraint." That tracks with Senate Republican leader Mitch McConnell's insistence that more stimulus spending is something to "sell" to his members, as well as leaked audio of Sen. Ben Sasse of Nebraska slamming Trump for "spending like a drunken sailor."
There's a strong sense of déjà vu here. In October 2010, the unemployment rate was sitting at 9.4 percent. The budget deficit had spiked to $1.4 trillion thanks to the emergency stimulus package passed the previous year in an attempt to save the economy. Despite that flood of initial funding, millennials were already struggling harder than most. According to the Bureau of Labor Statistics, the unemployment rate for 20- to 34-year-olds was 3 percentage points above the average and almost 5 points higher than that for 35- to 54-year-olds. And Republicans were cruising toward the "shellacking" that they'd deliver to Democrats in the midterms a month later with the message that President Barack Obama was leading the U.S. on a path to socialism with his out-of-control spending.
What followed was six years of a never-ending cycle of headlines about how the U.S. was surely going to go broke from and/or purposefully default on its debts and the increasingly incomprehensible ways that fiscal conservatives were demanding that we avoid that horrible future. The PAYGO Act! The debt ceiling crisis! The Fiscal Cliff! Sequestration!
The debates in Washington over numbers high enough to be meaningless did nothing for the young Americans trying to get their lives going. And in the crucial half-decade after the recession began, a string of tools to boost the economy — including federal funds to help states employ teachers and first responders despite their budget cuts — were blocked in the name of keeping costs down. The Economic Policy Institute in 2012 projected that passage of the American Jobs Act alone would have added 1.6 million jobs to the economy.
The unemployment rate for millennials remained at least 2 to 5 points higher than for older workers throughout that period, per the Bureau of Labor Statistics. And as the gig economy changed the definition of "employed," we remained burdened with billions of dollars in student loan debts, rising housing costs and a lack of retirement savings. Even now, millennials "make up close to a quarter of the U.S. population but hold just 3 percent of the wealth, Jill Filipovic wrote in her book "OK Boomer, Let's Talk: How My Generation Got Left Behind." "When boomers were our age, they held 21 percent," she wrote.
Meanwhile, in the two years that Republicans had united control of the White House and Congress, President Donald Trump's proposed budgets called for deep cuts in nondefense spending. In his fiscal year 2019 budget, that included slashing SNAP food stamps by 30 percent, cutting $6.8 billion from public housing and reducing health care spending by $763 billion over 10 years. But this time, the rules of the game had clearly shifted: Nobody in Washington really seemed to want to bother with actually reducing the deficit.
Here's the rub: It was never about the deficit. It was always about keeping wealth and power entrenched firmly where it is. The biggest tell was the $1.5 trillion in tax cuts that Republicans passed in 2017, the greatest legislative achievement of the Trump administration. The bill reduced tax revenue as a part of gross domestic product the next year more sharply than in any other advanced economy. Rather than invest that money back into workers or their companies, as the GOP had argued it would, the party doled out increased profits to executives and stock owners.
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While in the minority, the GOP blocked spending bills in the Senate; while a Democrat sat in the White House, it demanded harsh cuts. But were they once in the driver's seat, Republicans in Congress opted not to risk slashing popular programs. As a result, the budget deficit — pre-Covid-19 — had grown by $3.9 trillion in Trump's first term. The last times it had grown so high, according to The Washington Post's Andrew Van Dam: at the start of the Great Recession and in 1983, "when President Ronald Reagan was attempting to recover from a double-dip recession and spend the Soviets into oblivion."
Now with former Vice President Joe Biden wanting to raise taxes on people making more than $400,000 — a move that would presage more spending, yes, but also help actually balance the budget — suddenly it appears that a new brood of deficit hawks is hatching. Where there was once money to ensure that stockholders could make themselves $800 billion richer, there's now none for saving lives as the pandemic rages on.
Any time the deficit rhetoric pops up — and not just from Republicans — it gives the concept more credence than it deserves. That includes when moderator George Stephanopoulos asked Biden whether raising taxes on the wealthy was really a good idea with the economy in its current state.
His concern for the well-being of the top 1 percent of earners doesn't quite seem warranted. On the contrary, billionaires in the U.S. collectively increased their net worth by $845 billion from March to September. Meanwhile, millennials are going through the second recession of their working lives, still carrying all the drag on their lives and careers from the first. It's a downturn called the most unequal in modern U.S. history, with the vast majority of hurt falling on low-wage and minority workers. And it comes after years of policymakers' forgetting their ideology at a time when it would help them, who seem suddenly to be having a come-to-Hayek moment. It's kicking people while they're already down, trying to spin people's economic pain into a political win.
Hopefully you all had a weekend relatively free from stress. Here's some things you probably want to read while catching up:
- The Washington Post: A shelter that helps women fleeing domestic violence put up a sign supporting Black Lives Matters — and it cost the shelter support from police departments around its area of Wisconsin.
- The New York Times: Apparently, the decision to publish last week's Rudy Giuliani-fed story about Hunter Biden was a contentious one inside the New York Post, with one writer learning that her byline was on the story only after it published. In a word: yikes.
- NBC Think: Finally, an ode to the mute button that gives the humble — yet too often forgotten — part of our new normal the due it deserves.
- BuzzFeed News: In case you forgot, the Trump administration's fight against immigration of all kinds is still in full effect. And on the border, that's pushing desperate people to make tough choices about their futures.
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