Right now, Obama has an opportunity almost unique in our history to bring us to full recovery within the next four years. That is, if he can win a second term and figure some way out to keep the filibuster-mad Republicans in the Senate from blocking his every move, as they have in the past three-and-a-half years. (Their philosophy is “block everything he is trying to do and then denounce him for not cleaning up the mess that they themselves created during Bush’s presidency).
There is a convergence of three remarkable conditions that constitute an economic Perfect Storm, if somebody has the vision to take advantage of them.
1. Money has never been cheaper for the government to borrow than it is today. A 10-year T-Bill is going for zero interest. It is basically free money. A 7-year T-Bill is actually going for negative interest, meaning the government can borrow money by selling T-Bills and actually make a profit on the deal. All the money needed to create a major stimulus will never be cheaper.
2. Our country is in the midst of a catastrophic collapse of our entire infrastructure. Our roads, bridges, electrical grid, water delivery systems, waste disposal, and other systems essential to any recovery are past the due date on their cartons. If we don’t do something immediately, we will see our entire infrastructure disintegrate in the next decade.
3. We have a huge reservoir of unemployed working people, many with the requisite skills to repair and replace crumbling infrastructure. Just about every trade has been hurt by the collapse of the housing bubble and there is no shortage of workers in need of jobs.
So, we can borrow massive amounts of money for free, not adding to our debt; we have thousands of projects that are in dire need of being done as soon as is humanly possible; and we have an unusually large pool of skilled workers desperate for jobs.
Do the math. A program like this would create considerable income for the working class and middle class people who would turn around and spend the money on real market goods and services, thus skyrocketing demand. Today’s businesses are suffering from lack of demand, and have no incentive to create private sector jobs. But, the inrush of money from hundreds of thousands of workers now employed on a government stimulus plan to restore our infrastructure will reverse the situation and create more demand than the businesses can currently meet. This encourages businesses to hire more workers, expand factories, buy new machinery, all to meet the increased demand – thereby reversing the private-sector job losses and creating new private-sector jobs as well.
It’s a win-win solution – except for that small handful of oligarchs who don’t want to see an economic recovery, because it threatens their rule if the people are no longer serfs and peasants kissing the feet of the new Lords and Barons who are currently establishing their total dominion over this country.
I don’t know whether an Obama victory will lead the government to taking advantage of our Perfect Storm – we need not just a victory, but an active in-the-streets movement by the people to motivate him. When a group of reformers appealed to FDR, he answered, “I agree with you, I want to do it, now make me do it.” If Obama wins a second term, we have to get off our couches, turn off American Idol, and go out into the streets to make him do what he knows is right, but lacks the motive force to act.
A Romney/Ryan victory will throw this last opportunity to save our society away and finish off the job they are being paid (exceedingly well) to do – return us to the Robber Baron Gilded Age of the late 1800s, or, even worse, the Middle Ages.