From Frustration To Prosperity
The American people are frustrated.
They are fed up, and they have decided that they are not going to take it anymore.
The Tea Party and Occupy Wall Street movements are manifestations of this frustration and a reaction to the political class’s inability to deliver sound and thorough solutions to the nation’s challenges. Bank bailouts may have staved off financial collapse but have done nothing to create jobs. Tax cuts to wealthy “job creators” have only made problems of income inequality more acute. Misguided austerity in fear of public debt has caused us to shortchange our future at a time when we should be laying a foundation to leverage the opportunities of tomorrow.
Though nearly 70 percent of the US economy is fueled by consumer spending, we cannot depend on this alone to pull us out of the slump we are in. Real income at the median is down 9.8 percent since the start of the Great Recession through this June. The collective net worth of Americans has taken a $5.5 trillion hit, according to the Federal Reserve; mainly due to plummeting home values. Unemployment remains stubbornly and painfully high. Moreover, American businesses will be reluctant to invest until these consumers are more willing to spend – something even the committed optimist has to admit is an issue. We are stuck in a feedback loop whereby low consumer spending begets low private sector investment which, in turn, slows job creation and depresses consumer spending further.
Despite this cycle of stagnation, we have the power to change our trajectory. To get our economy moving again we must use all the resources at our disposal, including government: the only entity that has the authority and the capability to breathe life into our otherwise dormant recovery.
It makes sense that in tough times the government should be more aggressive than in times of prosperity. When things are good, consumer demand and business investment reinforce each other, but when our nation is in the economic doldrums an outside force is necessary to get us back on track. The economy may recover without public intervention, but at what cost? How much time, how many livelihoods and how much of our future are we willing to sacrifice to let things run their course?
To do nothing is to risk falling behind. Competition for the jobs and industries of tomorrow has never been more fierce, and the countries that win them will be those that have the foresight to invest in themselves and their people. If American businesses and workers are to effectively compete on this crowded global stage, they must continue to have world class education, infrastructure and institutions at their disposal.
President Franklin D. Roosevelt may have put it best when he outlined the expectations of the American people in his 1941 State of the Union Address: “equality of opportunity… jobs for those who can work, security for those who need it, the ending of special privilege for the few, the preservation of civil liberties for all, [and] the enjoyment of the fruits of scientific progress in a wider and constantly rising standard of living.”
The American people are frustrated because they are used to making things happen, not waiting for things to happen to them. While the public sector is certainly not the only creator of prosperity, it does have a significant role to play as we focus our efforts on the challenges facing our economy. To do nothing is to fall behind, but by making strategic investments now we can maintain our competitive edge and lay a foundation of prosperity for generations to come.
This article originally appeared on Politic365.
Christian Science Monitor, "A long, steep drop for Americans’ standard of living," Oct. 19, 2011
Board of Governors of the Federal Reserve System, "Flow of Funds Accounts of the United States: Flows and Outstandings Second Quarter 2011," Sept. 16, 2011