As if Americans needed anymore confirmation that austerity is holding the economy back, The New York Times this week reported that the consensus among private financial analysts – as well as by the International Monetary Fund and the U.S. Federal Reserve and others – is that sequestration and earlier spending cuts are translating into fewer jobs and a worse economy for the nation overall. The Times reported, "The nation’s unemployment rate would probably be nearly a point lower, roughly 6.5 percent, and economic growth almost two points higher this year if Washington had not cut spending" the way it has since 2011.
Graph by The New York Times
In surveys, a majority of the public says job creation should be the government’s main goal, and Larry Summers, former National Economic Council chairman, recently told The New York Times Magazine that there should be a "10-year commitment by the government to spend $1 trillion on infrastructure" to spur job growth.
But Republicans in Congress continue to prioritize deficit reduction. The Times article notes that less government spending slowed economic growth in five of the past seven quarters, roughly coinciding with the time period since "Republicans took control of the House in 2011." Due to the compromises they extracted from the White House in the last few years, annual discretionary spending as a percentage of the nation’s economy will soon be at the "lowest level in half a century," which will ensure the U.S. economy underperforms on the job creation front.