Austerity Vs. Investment

The economic recovery is creating the opportunity to reinvest in the deteriorated human and material infrastructure, which has been worn out because of the Great Recession and the long decades in which reducing the fiscal deficit has been the priority, while those same efforts were sabotaged with tax breaks.

President Obama made clear again yesterday that austerity needs to give way to investment. The modest fiscal stimulus approved at the beginning of his presidential tenure proved to have positive results on the economy without causing the catastrophe anticipated by the GOP.

With this good precedent, the White House budget plan focuses specifically in families and education – from preschool to community college. Strengthening the education sector with direct action that helps create a competitive workforce, as well as helping the economic progress of the individual, is essential.

The human investment proposed by Obama also reaches the underpaid active worker who must choose between working and get sick or caring for a relative, and the full-time worker who cannot save anything for retirement.

At the same time, the budget encourages investment in national and regional projects like a new commitment in transportation, from roads and bridges to public transportation systems.

The cost of those investments is high, but accessible. It’s paid for with changes in taxation for those who have been benefiting from the same tax breaks that decreased revenue to the treasury, thus bringing the austerity politics.

The closing of loopholes allowing tax evasion, and new fees on the financial sector, will not have negative consequences. On the contrary, putting that money back in circulation benefits the economy.

Several decades of austerity and tax breaks brought the fiscal, human and material deficit. It’s time to reinvest, to bet on a solid growth with a wide economic base. This is the Obama proposal that will help raise the standard of living with strong financial foundations