priming the pump works

When it comes to cholera outbreaks, removing the pump handle is a good idea. But when it comes to restarting an economy in recession, you want to prime the pump.

The New Deal, President Franklin D. Roosevelt's peacetime plan to "prime the pump" of the economy through massive emergency federal spending on projects that both built up the U.S. infrastructure and also created more jobs, was wildly successful. Don't let anyone ever tell you otherwise. If someone claims that only the U.S. entering World War II saved the country from the Great Depression, you might reply that the War-driven ramp up in manufacturing only did half the job, or less than half the job. During FDR's first 8 years (1932-1940), prior to the U.S. entering the war, the economy grew 58% (as measured by GDP), whereas during the 5 years the U.S. fought in WWII (1940-45), the economy grew 56%. I know, we can quibble with the analysis of the numbers, but the point is that the New Deal was a key component to the economic recovery after the Great Depression, and did dramatically stem the suffering of Americans during those worst of times.

All this to say that the Obama Administration's new plan to slash domestic federal spending by 5% is a very, very bad idea. I'm not sure why he thinks anyone cares more about the federal government's growing deficit than about not having a job, but a Hoover-like austerity approach simply will not work. Just look at where Gov. Schwarzenegger's austerity efforts of slashing education, health, transit, and other public services has gotten California.

Really bad idea. The Media Consortium calls this a Wall Street-driven economic plan, and lays out alternatives to supporting the destruction of our safety net and infrastructure.