http://www.laconiadailysun.com/story/james-veverka-11-11
To the editor,
After reading Tony Boutin's "Audacity of Despair", I think the Fox News spin needs a rebuttal. The present state of economic affairs is largely due to the Bush economic policies. Unemployment, hunger, economic growth, bankruptcies, and foreclosures as they stand are part of our most recent plummet created by GOP economics. In September of 2008, CNN/Opinion Research Corporation Poll showed that by a 2 to 1 margin, Americans blame Bush for this economic mess. In a more recent poll last Summer by the Quinnipiac Poll, the 2 to 1 margin stands. Clearly, Mr Boutin spends too much of his time watching Fox.
Let's take a look at the only crash worst than Bush's crash and see how they handled it. In the first year after the stock market crash in 1929, when banks imploded due to malfeasance, the unemployment rate was around 8-percent. A year and a half later it was over 16-percent. What was set in motion in 1929 was like a downhill freight train with no brakes. By 1932 the unemployment rate went above 24-percent. That year, 43,000 people, including 17,000 troops owed money, marched on Washington, DC. They set up camps but were dispersed by General McArthur's troops using bayonets and tear gas. In 1933, when FDR became president, unemployment hit 25-percent. The unemployment rate then dropped in 1934 to around 22-percent. The first national general strike was called in 1934. Not surprising,
In 1934 President Roosevelt finally took the economist John Maynard Keynes seriously and created a public works project to put millions back to work. The project included schools, bridges, dams and highways for starters. In 1935 the unemployment rate was still at 20-percent when in August FDR signed The Revenue Act of 1935. It also taxed high-earning Americans, and closed tax loopholes that the wealthy were using to legally avoid paying tax. It sharply raised taxes on income over $75,000 with those exceeding $5,000,000 paying 75-percent instead of 59-percent. Corporate taxes went down for small businesses and up for large ones.
By 1937, unemployment had dropped to 14-percent from the 25-percent peak. Wages, profits and production had finally returned to 1929 levels! The stimulus package was working. But then trouble appeared. Friends of Wall Street in FDR's cabinet urged spending cuts and a more balanced budget. What happened was the Works Progress Administration (WPA) was drastically cut and the Public Works Administration (PWA) nearly stalled. The economy dove into a harsh recession, unemployment shot back up from 14-percent to 19-percent, and manufacturing dropped 37-percent. FDR retaliated with attacks on the monopolists, who were deemed the major cause of the depression and this sudden downturn in 1937.. So in 1937 FDR sent to Congress another large stimulus package to re-fund the WPA, the PWA and other relevant programs. It passed and the economy recovered to its early 1937 levels by the end of 1938.
Tony Boutin tells us that the Obama stimulus was a failure, which is false. Most economists say about 2 to 3-million jobs were saved or created.. The truth of the matter is that the stimulus should have been bigger and the reason why we are climbing out of this hole so slowly is because the stimulus was too small and the GOP is deliberately obstructing economic success. Like FDR, Obama has proposed a new stimulus/jobs bill that would target bridges, schools, and roads but the GOP is obstructing again. Top economists say another 2-million jobs could be created.
Tony says that 81-percent of Americans are not happy with the direction of the country. With a 20 to 30-percent approval for the Tea Party, around a 10 to 12-percent approval for the Congress, the numbers suggest that Americans are far more troubled by the obstructionists than they are President Obama. Another distortion of the facts that Mr Boutin uses is blaming Obama for the debt ceiling fiasco. In a post debt fight CNN poll on August 9, 2011, Republicans had a disapproval of 59-percent while the approval for Democrats increased. Americans blamed the House Tea Party.
FROM the S&P Press Release: "We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. ....Our lowering of the rating was prompted by our view on the rising public debt burden and our perception of greater policy making uncertainty,.."
A very important part of recovery, "raising revenues" (with appropriate spending cuts), is an impossibility as long as the GOP controls the House and that is why our rating was lowered. That's the idea.
James Veverka
Tilton
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