There has been much talk about Rep. Paul Ryan’s budget that he outlined this past week. Republicans are hailing it as the austerity budget that we need for the mounting debt. Democrats are looking askance at the budget, saying it unfairly targets those that can least afford any cuts to assistance. Ryan’s budget cuts down on food stamps, moves to block grants for states on health care and other issues and increases military spending. Although our military spending is the highest actual dollars spent by any government (almost double of any other country’s expenditures) followed by China and Russia, the Ukraine crisis is giving fodder to many of the GOP. They are calling for more dollars to be spent on defense. Paul Ryan’s released budget echoes this sentiment. Spending our tax dollars to increase defense and not focusing on the human needs and costs is shortsighted at best.
Countering the press of the Ryan Budget release, last week the Center For Budget and Priorities had a forum on full employment. We rarely hear full employment discussed in any context. Because of technology advances and the recession, many people think full employment is impossible. If you add the resistance of the Republican-held House to supporting employment programs, then the conclusion is very much a “go it alone” policy with just the liberal end of the spectrum supporting them.
Larry Summers, former Treasurery secretary and former president of Harvard University, was the keynote speaker for the Full Employment Forum. His view runs counter to Paul Ryan and the conventional wisdom of the Republican Party. He believes we need to put money into the economy and not go with a Ryan-type austerity budget. In a paper he co-wrote, he says, “A fiscal expansion is then a win-win policy. It not only raises employment and output; it also reduces the long-term problem of government debt. Conversely, an insistence on austerity in these circumstances has perverse effects. It worsens the debt problem that motivates the policy. It prolongs the economic slump.”
There are human costs to unemployment that add to our country’s problem with a fiscal policy that cuts stimulus to help employment levels. One study from the Center for Disease Control (a government agency) looked at suicide rates between 1928 and 2007 in people who were of working age (25-64) and found that the study found the strongest association between business cycles and suicide among people in prime working ages, 25-64 years old. It also found that the largest increase in the overall suicide rate occurred in the Great Depression (1929-1933) – it surged from 18.0 in 1928 to 22.1 (all-time high) in 1932 (the last full year in the Great Depression) – a record increase of 22.8% in any four-year period in history. It fell to the lowest point in 2000.
In a literature review by E. Lynge there was a finding that Cancer rates also increased for the unemployed men even when the study controlled for smoking. “unemployed men compared with employed men have a 40% to 70% excess risk of lung cancer, which can probably not be explained by excessive smoking alone.” In another study, (Daniel Sullivan and Till von Wachter, “Job Displacement and Mortality: An Analysis Using Administrative Data,” Quarterly Journal of Economics, August 2009) it was found that losing a job in mid-career actually decreased years of life by one and a half years.
Unemployment doesn’t just impact the people who lose their jobs. Researchers Ann Huff Stevens and Jessamyn Schaller found that job loss for those with a high-school education increased the probability that their children would need to repeat a grade in school. Another study showed that there were higher rates of divorce after losing a job but not after one person in the couple developed a disability.
These studies and research take us to the obvious conclusion that employment or unemployment has an effect that can’t be reduced to the debt or deficit. It impacts all of our country and us. Policy makers like Paul Ryan need to take that into consideration before waving this budget plan in the air and increasing military spending while leaving families at risk.
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