Raising the Debt Ceiling

No longer in the discussion: Jobs

Nancy Marshall-Genzer Jul 28, 2011
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Raising the Debt Ceiling

No longer in the discussion: Jobs

Nancy Marshall-Genzer Jul 28, 2011
HTML EMBED:
COPY

Steve Chiotakis: The clock continues to count down to Tuesday’s debt ceiling deadline when the treasury department says the government is expected to default. Negotiators have stopped talking about including help for the unemployed in any kind of final deal. But why?

Marketplace’s Nancy Marshall Genzer takes a look.


Nancy Marshall Genzer: Remember that “grand bargain” between House Speaker John Boehner and President Obama? It included a little stimulus spending, giving employers a tax break, and letting them bring home profits earned abroad — in hopes they’d use the money to hire.

Now those very modest ambitions are gone. Ryan McConaghy is a policy analyst at the centrist Third Way think tank.

Ryan McConaghy: The imminent specter of default is driving the discussion to just what can be done to raise the debt ceiling and get both sides to sign off.

Not everyone agrees that the government should spend money to boost employment. Some Republicans say cutting spending will create jobs. Economist Donald Marron was one of President Bush’s top advisers. He says that’s true in a healthy economy — but not now.

Donald Marron: We’re in what’s sometimes called a Keynesian world where if you do sharp budget cuts, that will result in less employment.

Marron says jobs will be back on Washington’s agenda eventually, because unemployment is voters’ biggest concern.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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