Government Must Continue to Spend to Keep Economy Afloat


With the passage of legislation that raised the debt ceiling in the United States, neither Democrats nor Republicans were happy about the terms, but the consequences may be far greater than either party believes.

The United States is on the brink of a double-dip recession. Over and over again, officials have claimed that we are going through a jobless recovery: Our GDP is improving, but net hiring is barely, if at all, outstripping net cuts. However, this is entirely untrue. Revised first quarter 2011 estimates of GDP now show stagnant growth of 0.4%. Early second quarter GDP estimates show growth at a not much better 1.4%. This is not growth seen in a recovering economy. This is what an economy teetering on the edge of greater economic woe looks like.

To prevent a double-dip recession — a second recession in the midst of recovery from the first — the U.S. government must take action. It has been proven as far back as the Great Depression that a surefire way to create growth in an economy is to allow government to spend when the private sector is not. Yet, the current political climate shows a Republican party obsessed with cutting spending, and a weak Democratic party that has folded to nearly every Republican request.

Over the long term, running huge budget deficits can be harmful. However, in the midst of economic troubles, cutting large amounts of spending is very detrimental. Included in the debt deal is a limit on spending on infrastructure projects. Highway repair, broadband extension, and more projects like these not only help keep the U.S. in running condition, but also help jump-start our economy.

Government spending brought us out of the Great Depression, and when the federal government started to reduce these cuts, the United States was faced with a deep recession. Without World War II to create American spending, who knows how long the United States would have remained in economic hardship.

In the past, Republicans have always been content to go into more debt now so they could spend for what they deem important. This was true as recent as the Bush administration, which started two wars, and at the same time implemented large tax cuts. Last year, we saw President Barack Obama pass a Medicare overhaul, while endorsing an increase in taxes for the top 2% of Americans.

Now is the worst time for the GOP to decide that spending has gone too far. While Republicans held office, they were fine with mortgaging our county’s future to fight two separate wars. However, once the Democrats took power, they immediately took a platform where any spending was horrible for this country, regardless of the intent. With our country paralyzed by the terrible political climate, we may be forced to sit back and watch as our country falls into its second recession in three years.

If there is any chance of preventing a double-dip, jobs must be created. And since the private sector is clearly stagnant, the government needs to create these jobs. But last week’s promise to cut spending where we most need it, on infrastructure, could have catastrophic effects on the job market. Without more government spending, be prepared for more economic hardship.

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