Damon Silvers, the director of policy at the AFL-CIO, speaking at a liberal activist conference today, said that the U.S. economy "remains weak" and needs to be revived by trillions of dollars in new government spending and drastically higher taxes, especially on those with higher incomes.
The address by Silvers to the Take Back the American Dream conference of the Campaign for America's Future underscores the difficult position President Obama is in as he faces reelection. Obama's reelection chances hinge on his ability to convince Americans that the economy is improving, but the liberal narrative is that the nation is facing a litany of problems that require even bolder action than Obama pursued in his first term.
“Economic growth in this country remains weak," Silvers said. "From month to month, it’s a little unclear how weak it is, but it’s weak.”
By Silvers' telling, the problem was that when Obama entered office, there was mass unemployment, decling wages and falling housing prices -- all of which led to a deficit. But instead of pumping enough government spending into the economy, in the past several years, the United States pursued austerity polices -- the same type of policies that have caused a crisis in Europe and led to the Great Depression.
“It’s not just that you have this really hard right, reactionary, redistributionist agenda coming out of the Republican Party," Silvers observed. But he said, “There’s something called the Inside the Beltway agenda” This is the psuh for a Simpson-Bowles style deficit reduction plan that he said pursues the same sort of austerity policies "less obviously" than Republicans.
“We know what Republicans are going to do," he said. "The question is, will Democrats start making unilateral concessions?"
Though he said Obama and Democrats in Congress are generally onboard with the basic structure of the preferred liberal agenda (more infastructure spending, preventing cuts to social programs and rasing taxes on wealthier Americans) they haven't pushed it on the scale that Silvers deems necessary.
He said, “When we talk about infrastructure, we need to talk about trillions, not billions. When we talk about taxes where the wealthy pay their fair share, repealing the Bush tax cuts is not enough. It doesn’t even begin to be enough.”
He said, “We’ve gotta fix the housing mess and the student loan mess” and suggested write downs on loan principal.
If liberals and conservatives, despite their drastically different policy prescriptions, are both starting from the basic premise that the nation is facing a deep set of economic problems, it's a difficult year for Obama to be running as the incumbent.