Over the last half century, U.S. economic theory and policymaking have been rooted in the false promise of “free markets,” and politicians on both sides of the aisle have worked to minimize the government’s role as an economic driver and force for the collective good. Bolstered by the political power of the private sector, elected leaders have spread the misguided belief that markets alone could deliver economic freedom to people and communities.
And then through deregulation, corporate tax cuts and constant attacks on the government’s ability to function, policymakers have been able to erode the trust, power and influence of the public sector and prevent government from doing the good work that would prove them wrong. This worked for decades, fueling division and disinvestment that hit people of color hardest.
Today’s unprecedented inequality, unrestrained corporate concentration and corruption have exposed this deception. Furthermore, a growing chorus of prominent researchers, academics and activists have been calling for a renewed system of economic governance — the same system of economic governance that paved the way for some of the most transformative eras of U.S. history. And now that President Joe Biden has signed the American Rescue Plan, we cannot allow this outdated, debunked and patently false ideology, and the unproven talking points about the deficit and debt, to be used to rationalize government inaction on other economic priorities.
As we build back better from the COVID-19 pandemic and recession, we must reposition the government as a strong and positive actor in our economy and society. The Biden administration has the right idea, but this is just the beginning. The $1.9 trillion Covid relief package is a much-needed down payment on a full economic recovery, but it is only a down payment, and public investment cannot end there.
Big Government Can Deliver a Full, Inclusive Recovery and So Much More
Fear of government power shackled our response to the Great Recession, and families, workers and our economy at large suffered for it — and many continue to pay the price. The unfortunate truth is that the COVID-19 crisis highlighted and exacerbated the major problems within our fragile and unequal economy, but it didn’t cause them. These problems can be traced back to the structural discrimination baked into our economic systems and the intentional government choices that uphold these systemic inequalities.
If we want to fully recover from this pandemic, policymakers must both provide immediate relief to people to survive, and they must chart a new course — there is too much on the line.
In confronting a historic crisis, Congress and the Biden administration chose a historic solution and chose to learn from our nation’s previous mistakes. The American Rescue Plan works to stabilize our economy and to help people weather the current recession by:
- Extending unemployment insurance,
- Providing direct relief to state and local governments,
- Cutting child poverty in half,
- Targeting aid to communities of color, and
- So much more.
The recent passage of the American Rescue Plan is further proof of the critical role the government should play in the wake of a crisis and how full recovery cannot be achieved without major public investment. Already, the Federal Reserve projected the U.S. economy will grow 6.5 percent this year, the fastest pace in four decades and Goldman Sachs projects an unemployment rate of 4 percent by the end of the year.
Big public investment isn’t just about meeting the moment; it’s also about dismantling the oppression in our economy and that pervades our society. It gives us the opportunity to actually remedy this inequality by reimagining and building a new economy that includes government actions that solve big problems — like the housing and health care crises and the $1.7 trillion in student debt. It’s necessary that we rectify the harm of the last 50 years and recommit to investing in people.
That’s why the pathway of bold government action is the direction we need to go as we work to remake our nation’s potential, redefine its priorities, and secure fundamental economic rights for the 21st century.
Big Public Spending Is Necessary, and It’s Popular, Too
Going big on public investment requires us to rethink public spending. Though deficit hawks are always swarming, government investment is necessary, and recent polling has shown us that voters want and need the government to spend big now if that’s what it takes to build a better future tomorrow. In fact, a recent poll showed that the American Rescue Plan increased in popularity when respondents learned the price tag.
This is especially true for voters under age 45. “Younger people may be most interested in massive public investments because they’ll have to live with the decisions made by today’s policymakers for decades to come,” writes Kate Taylor Mighty, the senior manager of program and strategy at Groundwork Collaborative. “Despite the jockeying on Capitol Hill, the real question isn’t about the urgency of spending now… The better question is, when will Congress join young people of all races, marginalized people of all ages, and a growing majority of the public, and finally put our national needs ahead of our national debt?”
Workers, families, and our shared economic well-being are depending on policymakers to go big and for the government to work better for more. In the end, people are the economy — not markets, not headline measures like average gross domestic product, and certainly not the national debt. We believe that the government should do a lot for the public, and we can already see how much that gets us all, especially those most in need and at a structural disadvantage.
Jeremie Greer is the co-executive director at Liberation in a Generation.
Lindsay Owens is the interim executive director at Groundwork Collaborative.
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