Today the president delivers a major economic address at Knox College in Galesburg, Illinois against a background of a growing consensus among economists throughout the world that the GOP's brand of "trickledown" economics is a complete failure wherever it is tried.
For several years the same "cut deficits at any cost, austerity for the poor and middle class" economics that is espoused daily by the Republican Party in the U.S, has swept the capitals of Europe. It has been a disaster. GDP in the Euro-area dropped in 2012 and continued to decline in 2013.
At last week's meeting of the G-20 finance ministers -- whose governments oversee 90 percent of the world economy -- there was a clear consensus on the need for robust fiscal stimulus in order to spur worldwide economic growth and a rejection of austerity.
The New York Times reported that:
...most governments see recovery as too weak to risk reducing spending on unemployment benefits, job training, education and other public sector outlays....
"The debate between growth and austerity seems to have come to an end," the official said.
That consensus of economists was reflected by Federal Reserve Chairman Ben Bernanke when he testified before Congress a week ago. Bernanke said that the greatest threat to the recovery were attempts in Congress to slash spending investments that are critical to our economic growth.
And that risk is very real, since Republicans in Congress have been passing the most radical cuts in critical investments in a generation.
House GOP appropriators are preparing legislation to cut the EPA budget by a third, slash Administration requests for renewable energy investment by two-thirds, eliminate the Corporation for Public Broadcasting, cut education grants to poor students by 16 percent, cut the Department of Labor by 13 percent, cut funding for the National Endowment for the Arts and Humanities in half, and cut the Fish and Wildlife Service by 27 percent.
And of course, Budget Chair Paul Ryan has proposed a budget that would eliminate Medicare and replace it with vouchers for private insurance.
Ryan is quoted in The New York Times as saying: "It's about time we cut some spending around here..." -- all so that he can cut taxes for the wealthy.
Only trouble is, most economists agree that it is precisely the elimination of critical government expenditures that threaten the economy's ability to create new jobs.
Since President Obama's stimulus program stopped the Great Recession and began to turn the economy around, there have been 40 straight months of private sector job growth -- and the creation of 7.2 million new jobs. But at the same time we have lost 600,000 public sector jobs.
Those losses in government jobs have resulted mainly from the GOP's demand for major, immediate spending cuts at the state and federal level. Just two years ago, the GOP held the entire economy hostage, demanding huge spending cuts as the price to allow the government to raise the debt ceiling and pay its bills. Those demands resulted in the "sequester" -- the meat cleaver cuts that the Federal Reserve estimates will cost 1.5 percent growth in our economy this year.
Now the GOP is at it again -- threatening to throw America into default if the Democrats don't agree to inflict more economic pain on their fellow citizens with even more draconian cuts, when the debt ceiling must be increased again this fall.
Republicans talk endlessly about "waste." But let's be clear that real waste is what happens when big chunks of the workforce sit idle, not producing goods and services. That creates waste that will never be recovered and it causes all of us to have a lower standard of living. The unemployment of our people -- and our plants, equipment and resources -- is the major threat to America's economic well-being, and that is exactly the result of Republican policies every time they are tried.
But this should not come as any surprise to anyone with even a modicum of memory. This is not the first time in recent history that the evidence has indisputably shown the bankruptcy of GOP economic policies. It was just five years ago this September that the same "trickle down" economic policies resulted in the greatest financial and economic collapse in 60 years.
When the Republicans passed the Bush tax cuts in 2003, they promised massive economic growth. The notion that cutting taxes for the rich would "lift all boats" turned out to be sheer fantasy. The Bush years were the first period in modern American economic history to experience zero private sector job growth -- zero.
And of course the Republican commitment to allowing Wall Street bankers and speculators to run wild ultimately resulted in the September, 2008 financial meltdown.
That commitment has not waned. The House GOP plans to cut $200 million from the budget of the Security and Exchange Commission (SEC) that would have been spent on investigations and enforcement actions against Wall Street. Note, by the way, that since the SEC is paid for by Wall Street, the $200 million will find its way directly into the pockets of the big Wall Street banks.
The lesson is simple. The evidence is in. If you believe the Republican notion that economic growth happens from the top down, I have some great swampland to sell you.
Economic growth happens from the middle out. It happens when everyday people have money in their pockets and can buy the products and services that cause companies to invest and hire.
Economic growth happens when everyone shares in the fruits of our economy -- not just the top 1 percent.
Economic growth happens when together - through our government -- we invest in the education and health care and infrastructure and research that provide the foundation for the entrepreneurial energy of the private sector.
The best days of America could certainly be ahead of us. And the greatest threats to that future are policies that seek to benefit the wealthy few instead of the vast majority of our people -- and the policy makers who are willing to threaten our entire economy if they do not get their way.