The negotiations to avoid the so-called fiscal cliff have been described as a "grand bargain," but from where I sit it seems more like a big bust and a lot of lost opportunities. There's nothing grand about cutting spending and raising revenues when 12 million Americans are out of work.
We need something a whole lot grander.
Consider this. Within the next eight years, the global middle class will expand by over one billion people. By 2030, the number will grow another 1.7 billion for a total of almost five billion people across the world earning what is considered a middle-class wage.
That's a staggering number. The purchase power of five billion people could translate into millions of new, good-paying jobs for Americans but only if we start investing in what we need to create those jobs -- improved infrastructure, a better education system, alternative energy sources, workforce development and support for small businesses.
Instead of focusing on creating jobs, we are, as they say in Mississippi where I'm from, running around like chickens with our heads cut off, clucking about less spending and more taxes -- both are which are not likely to hatch any jobs anytime soon.
We need bigger ideas, bigger budgets and, for the time being, a bigger deficit. OMG. I said it. We need a bigger deficit. We went deeper in debt to bail out the banks. Whether or not that was a good idea remains up for debate four years later. I would argue, though, that stimulating the economy and helping people obtain and keep jobs is an investment with much greater returns than bailing out banks.
As a group of mayors made clear in meetings with the congressional leadership last week, walking off the fiscal cliff threatens our ability to provide basic services, must less to invest in the future. Obviously allowing arbitrary, across-the-board cuts in both domestic and defense spending is no way to run a country. Such a move would result in a decline of personal earnings by an estimated $109 billion annually. Two million more people would be out of work in the first year alone. It would strangle the life out of an iffy economic recovery.
All that is true, but it is also true that the grand bargain under discussion by both parties won't solve our underlying economic problems and won't position us to take advantage of global markets that could be ours for the taking.
At a recent U.S. Conference of Mayors meeting, about 60 mayors from across the country engaged in an all-day discussion about this very topic. They heard from experts that by 2020, key Asian markets will import almost $10 trillion in goods alone. If we can retake our historic share of these growing markets, it would add almost $600 billion in new exports in 2020 alone, supporting 3.5 million good U.S. jobs. That's almost a third of the 12.7 million Americans unemployed today.
These 3.5 million jobs are not going to be created by reducing the deficit, slashing spending and raising taxes.
They will be created through public and private investments in:
•Railways, bridges, highways, airports, seaports, water and sewer systems and other infrastructure we need to develop to move exports across the country and out;
•Small-to-medium size businesses to help them take advantage of growing global markets; only one percent of U.S. businesses export today, and 58 percent of those businesses export to only one market;
•Workforce development to ensure workers are trained on an ongoing basis so they are prepared for jobs available not just now but also five years and ten years down the road;
•Alternative energy to reduce greenhouse gases, stabilize climate change's impact on existing infrastructure and reduce the billions we are spending annually in disaster relief and rebuilding efforts;
•Education reform focused on standards and results so we are providing the quality education that other industrialized countries are offering to their children.
If the painful process we have been witnessing for over two years produces only deficit reduction without any serious investments in the people and places that make up America, then the grand bargain will be more paltry than grand and more blunder than bargain.