In These Times - June 24, 2021
In his classic 1958 book The Affluent Society, economist John Kenneth Galbraith wrote, “Here, in an atmosphere of private opulence and public squalor, the private goods have full sway.” Nearly 70 years on, Galbraith is still right. For a country like the United States where the availability of safe drinking water is hit-and-miss, squalor is the right word — moral as well as physical.
A Twitter wag noted that we are flying helicopters remotely on Mars and broiling in Texas because scientists are in charge on Mars and Republicans are in charge in Texas. Climate change and the current struggle against the pandemic typify the risks of public squalor — the incapacity to mobilize collective resources to address collective problems.
In the U.S. Congress, plans to remedy this situation are afoot, ranging from paltry to ample, but ample is not coming easy.
The Democrats are eyeing a $4 trillion budget increase. This spending would be spread out over 10 years, but in the context of recent federal budget history, it’s still a departure. For instance, $400 billion a year might be two percent of U.S. GDP in 2021, which would be big by historical standards. For something resembling a democratic socialist budget comparable to European social democracies, more like ten percent of GDP would be needed. But in light of the narrowness of the Democrats’ majorities in Congress, two percent is not shabby, especially coming on the heels of the recent $2 trillion Covid-19 relief package, the American Rescue Plan (ARP).
Under budget reconciliation rules, Democrats can pass any tax-spending package they want with 50 votes. For instance, Senator Bernie Sanders (I‑Vt.) who heads the Senate Budget Committee is developing a $6 trillion plan for physical and human infrastructure that would include policies from both American Jobs Plan and American Rescue Plan. The constraint on passing such a plan now is not the Republicans or the filibuster — it’s a handful of nominal Democrats within the Senate caucus. Democratic Sens. Joe Manchin of West Virginia and Kyrsten Sinema of Arizona get all the brickbats, but hiding behind them are a few more laggards. It may not be possible to completely buy out the dismal duo of Sinema and Manchin, but if they can be rented to vote for a Democratic plan, there is nowhere for the backsliders to hide. There is lots of room in a multi-trillion-dollar package for sending some goodies to West Virginia and Arizona.
The chief sticking point now is the hidebound concern about “pay-fors,” on the pretext of precluding unhappy increases in the national debt. Since there’s still has a long ways to go to reach “full” employment, especially for communities of color, deficit worries are ill-timed. An economic downturn, when employment is below par and interest rates are rock-bottom, is the right time to launch a new wave of public investment.
A word about investment, which has come to be the progressive adjective for Everything We Like. Non-investment, also known as consumption, can be good too. An example is the expanded child tax credit that was included in the ARP — not investment, but still good. The same goes for reducing the Medicare eligibility age down to 60, as has been proposed by Sanders and other progressives.