Today’s jobs report may be bad news for President Obama and possibly good news for Governor Romney but it is disastrous news for the American people. The economy produced less than 100,000 net new jobs (and if the past few months are prologue, this number will be revised down next month). The manufacturing sector actually lost 15,000 jobs. Even worse, nearly 400,000 individuals just quit looking for work and the labor force participation rate hit a low of 63.5 percent. The decrease in the labor participation rate is a threat to the long-term health of the economy. You can tax the rich all you want, but the only way to generate significant additional government revenues is to have lots more people working. To have that, you need a strong economy and this just isn’t it.
A number of speakers at the Democratic convention made reference to Franklin Roosevelt and to the 2008 recession being the most severe since the Great Depression. Academics are still debating how well Roosevelt’s policies worked to revive the American economy and political pundits continue to argue whether the current recession was really as bad as Democrats claim and the recovery as tepid as Republicans assert.
But one thing Roosevelt did not do in his first two terms was cut defense spending. Yet, this is what the current administration did, to the tune of $482 billion over the next decade. This cut will result in a loss of over 1 million jobs, which is almost exactly the number of jobs President Obama claims his new jobs bill would create. In addition, sequestration, which is on schedule to take effect on January 1, 2013, will cut another $500 billion in defense spending, $50 billion of which will happen next year. It is interesting that recent reports about Bob Woodward’s soon to be published book cite the author as claiming that it was the White House that came up with the hair-brained idea of holding domestic discretionary spending, in general, and defense spending, in particular, hostage to a grand bargain.
President Obama and the Democratic Convention made a bid deal of the administration’s record on national security. Now, the President should take advantage of this position and the dismal jobs report to call for a two year hold on the defense reductions proposed in the 2011 Budget Control Act. Investing in defense is a two-fer. Not only would it result in rapid job creation but it would support American security interests in a time of growing uncertainty and danger in the world.
The focus should be on increasing spending on existing platforms and systems, those with hot production lines. The administration should buy back some of the 1,000 F-35s that would have been built by now if the program’s original schedule had been maintained. The Navy’s shipbuilding accounts should be plussed up with the money going to acquire additional DDG 51s, Virginia-class SSNs and amphibious warfare ships. Stocks of precision guided weapons and theater missile defense interceptors such as the Standard Missile 3 should also be increased. I would throw in money for additional Coast Guard cutters and new search and rescue helicopters. Finally, putting money back into the Operations and Maintenance accounts for things like spare parts and overhaul of battle worn equipment makes a lot of sense. This last area would ensure jobs in both the private and public defense industrial bases.
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