|
NATIONAL
JOBS FOR ALL COALITION % CIPA, 777 UN Plaza, Suite 3C, NY,
NY 10017
UNCOMMON SENSE 1
©September 1997
INCREASING
UNEMPLOYMENT
INCREASES
THE DEFICIT
REDUCING
UNEMPLOYMENT REDUCES THE DEFICIT
By
Helen Ginsburg, Professor of Economics, Brooklyn College
of the City of New York and Executive Committee, National Jobs
for All Coalition, and Bill Ayres,
Director, World Hunger Year and Advisory Board, National Jobs
for All Coalition.
The President
and Congress try to outdo one another on who can cut the Federal
budget deficit the most. But efforts to reduce the deficit at
the expense of necessary social programs are unnecessary and counter
productive. In fact, much of the recent reduction in the deficit
is due to the decline in unemployment.
According to the last
Congressional Budget Office estimate of the impact of unemployment
on the deficit,* a reduction of unemployment by only one percentage
point starting in January 1995 and sustained through fiscal
year 2000 would have netted the government $415 billion over those
six years. Most of that would come from increased taxes paid by
more people working and greater business profits ($315 billion).
The rest would result from less money needed for unemployment
insurance and other social programs ($32 billion), and less money
spent on interest payments to service the debt ($68 billion--$23
billion in fiscal year 2000 alone).
Remember, this $415
billion is from only a one percentage point decrease in unemployment.
The mind boggles when confronted by how much could be generated
if we actually reached a level of full employment. Think of how
that money could then be reinvested in our society to fund the
education and training programs we need to raise more than a quarter
of our citizens out of poverty and near-poverty, to eliminate
hunger, rebuild our transportation systems, housing, and recreation
areas, improve our environment and support working parents with
child care.
Every percentage point
less in unemployment makes good economic sense by not only reducing
the budget deficit, but also reducing the human deficit that we
see in the economic insecurity, growing poverty, hunger, homelessness
and crime that are tearing apart our society. We'll get stronger
families and an enhanced quality of life.
Let's have full employment
and reinvest the savings into a more productive, livable society
with Jobs for All!
*Congressional
Budget Office, Economic and Budget Outlook: Fiscal Years 1996-2000
(Jan 1995). The CBO for years has made this estimate, but
no longer does so. For further information about the deficit,
see Sheila D. Collins, Helen Lachs Ginsburg and Gertrude Schaffner
Goldberg, Jobs For All: A Plan for the Revitalization of America,
New York: Apex Press. 1994. Chapter 10.
Editor:
June Zaccone, Economics (Emer.), Hofstra University
The
National Jobs for All Coalition is a project of the Council on
Public and International Affairs.
|
