The economist who served as President Clinton’s Labor Secretary says he hopes President Obama outlines an “aggressive” job-creation plan this evening that’s at least half-a-trillion dollars. Robert Reich says now is the wrong time to reduce federal spending.
“We could easily be in a recession right now, but if we cut back public spending at a time when the private sector is cutting back, then we are almost inevitably doomed to another recession,” Reich says. “That means higher unemployment. That means slower growth. That is shooting ourselves squarely in the feet.”
According to Reich, businesses won’t start creating new jobs until consumer confidence returns and wages rebound, so it’s up to government to close the gap now.
“Regardless of your ideology, regardless of whether you like government or you don’t like government, it has got to be government,” Reich says. “This is Economics 101. This is just common sense, so government has got to help, right now, to generate enough demand to get people back into jobs.”
Reich envisions a job-creation package that includes spending that repairs or enhances the country’s crumbling infrastructure, as well as a government jobs program similar to the Work Progress Administration of the Depression Era. Republicans, including the party’s presidential candidates, advocate a combination of budget cuts as well as reducations in taxes and government regulations. Reich says President Obama needs to confront those ideas and the GOP’s candidates in his speech tonight.
“I think what the president has got to do is simply force the Republicans’ hands on these issues. For example, Republicans keep saying a smaller government means more jobs. There is no economic theory that I know of that justifies that point view,” Reich says. “…In eight of the last recessions — in fact, if you include the Great Depression, it’s nine of the last downturns that government has had to expand both spending and the money supply in order to get people back to work.”
Reich made his comments this morning during taping of the Iowa Public Television program, Iowa Press, which airs Friday night. Reich spoke at the University of Iowa last night. He’s scheduled to speak at Drake University in Des Moines this evening.