The Congressional Progressive Caucus (CPC) released its budget last week. As usual, it was almost completely ignored by the major media outlets. As a result, we know very little about the actual ideas in the budget, but we know a lot about the media.
Let’s start with those ideas: most importantly, the progressive caucus budget is designed to get us back to full employment. It calls for a major program to modernize and improve our infrastructure. It would also provide funding to state and local governments to reverse many of the cutbacks in education, healthcare and other areas over the last few years. In past recoveries, state and local hiring has helped to boost the recovery. In this recovery, cutbacks slowed growth.
This kind of spending would lead to larger deficits in the first two years of the budget window, but make no mistake: it also would lead to more growth and more jobs. The simple fact that just about everyone in the budget debate concedes is that, in the near-term, if we want more jobs, we will need larger budget deficits. And we know we have no problem borrowing the money because interest rates are extremely low.