CBO to Super Committee: Full Employment Would Reduce Deficit By A Third

[ProSense]

CBO to Super Committee: Full Employment Would Reduce Deficit By A Third

Brian Beutler

Many Democrats would like to see the deficit Super Committee's forthcoming fiscal plan scored for its expected impact on economic growth. The idea is that if the Congressional Budget Office says the plan is a job killer, it won't pass, and members will figure out how to make it economically neutral or better.

The Super Committee's been cool to the idea so far, but one of its members, Rep. Chris Van Hollen (D-MD) has helpfully underscored why economic growth (or lack thereof) is such a key issue, even if all you care about are budget deficits.

"I asked CBO to estimate the size of the deficit if the economy were at full employment, and CBO's response confirms that our weak economy is the major contributing factor, accounting for over one third of the projected deficit for fiscal year 2012," Van Hollen said in a statement last night. "It's clear that the fastest and most effective ways to reduce the short term deficit is to put Americans back to work."

Here's how CBO puts it. Under full employment, "the projected federal deficit under current law in fiscal year 2012 would be about a third lower, or roughly $630 billion instead of the $973 billion projected in CBO's most recent baseline. That deficit would be equal to about 4.0 percent of gross domestic product (GDP), compared with the 6.2 percent deficit projected for 2012 in CBO's baseline.

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[DCKit]

1. It's obvious when you consider the fact that only working people pay taxes.

Somebody has to carry the 1%'s share of the tax burden.

[ProSense]

2. "Full Employment Would Reduce Deficit By A Third"

That's an idea only a Republican would hate.

[DCKit]

3. In soooooo many ways.

Aside from not having their boots on our necks and people suffering in poverty, full employment leads to rising wages as we would shift from competition for jobs to competition for workers. Despite the fact that full employment would lift all boats as it did from the late 40's to the early 70's, they'd still feel disadvantaged as the middle class re-emerged.

The economics seem logical to me, but they just don't seem to get it.

[kenfrequed]

7. The 1% gets it

They also get that money is a closed system and wealth is zero sum game. They know ultimately to hire more people someone somewhere has to give up some of the wealth to create these jobs. The only other way new "money" enters the systems is by devaluing that which already exists by printing more and causing inflation.

The plutocracy decided that they don't want to lose anything (See also Michael Moore's movie) and don't want to risk real democracy taking money from them.

[yodermon]

6. Full employment would increase REVENUE! Thus the repukes must be against it by definition. n/t

[elleng]

4. Glad Van Hollen's on this.

[Tarheel_Dem]

5. K & R