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 CNS Story:

WASHINGTON LETTER Dec-9-2011 (1,090 words) Backgrounder. With photo. xxxn

Economic hardship hits nearly all, from individuals to nations

By Mark Pattison
Catholic News Service

WASHINGTON (CNS) -- It's not new, but it's still news: The economy remains in a funk. Not just in the United States, but it has spread to many nations around the world.

Although the "Great Recession," which officially started in December 2007, was declared over in June 2009, U.S. unemployment numbers were staying stubbornly around 9 percent. In December, the figure dipped to 8.6 percent, the lowest it's been since the second full month of Barack Obama's presidency, but that was because nearly three times as many people quit looking for work as found jobs.

The number of poor Americans has grown to roughly 49 million, or close to one in six overall.

New Jersey's Catholic bishops, in a Nov. 21 statement, called on Americans to "address the critical needs of the poor who live among us. ... We cannot ignore children who go to bed hungry, parents who are jobless, families who are homeless, the sick who suffer without medical care, or the elderly who live in infested or unsafe housing."

Most leading economic indicators show little change. And working Americans -- in terms of "consumer confidence" -- still seem wary over the prospect of losing their job or the possibility of a second recession.

Deficit cutting might not have been all the rage in 2011, but efforts to cut deficits spurred lots of rage from various segments of the population.

When new Wisconsin Gov. Scott Walker tried to force through a "budget repair" bill to solve a projected $117 million budget deficit, some Democratic state senators fled the state to delay the vote, which ultimately went Walker's way. Thousands of Wisconsinites rallied outside, and inside, the state Capitol in Madison for weeks to protest the move, and a recall-Walker petition drive was under way.

In the early days of the protests over the bill, which hiked state workers' health care and pension contributions while limiting their bargaining rights, Milwaukee Archbishop Jerome E. Listecki said, "Hard times do not nullify the moral obligation each of us has to respect the legitimate rights of workers."

Nationally, the usually routine request by the president for Congress to increase the nation's debt ceiling met with stiff resistance by the new Republican majority in the House. Initial rounds of cuts earlier in 2011 brought only temporary relief -- along with continued sniping at one another from both sides of the aisle. Only a last-minute deal brokered in early August averted a possible U.S. default on its debt obligation.

The deal included the formation of a bipartisan, joint House-Senate deficit reduction commission dubbed the "supercommittee." However, it failed to reach agreement on a longer-lasting solution to curb deficit spending, thus triggering automatic cuts in 2012.

One aspect of the supercommittee's work was revenues -- taxes, to be precise.

"We really need tax reform," said Sister Marge Clark, a domestic-issues lobbyist for Network, the Catholic social justice lobby. "There's a big difference between Network's view and a lot of other people," added the Sister of Charity of the Blessed Virgin Mary, "in that tax reform has to be revenue-positive, because we simply don't have enough money" to pay the nation's bills.

"All kinds of tax reform is needed. The whole structure has become convoluted, it's become topsy-turvy," Sister Marge said. "I think the tax code has grown the way an awful lot of other legislation has grown. They pass some things, and realize that it doesn't work or it doesn't do these things (originally touted), and they put a patch on it.

"Then there's another little piece where it becomes obvious that it's not working, so they do it again."

But she's not optimistic about substantive change happening soon. "Probably not before the lame-duck (session following the 2012 presidential election), if you want to be really blunt," Sister Marge said. "I seriously doubt anything will happen before the lame-duck session."

In the midst of the ongoing financial struggles, the Occupy movement sprang up in much the same way as the tea party movement arose two years before -- with a sense of unease with and distrust of those who manipulate the levers of power. Initially conceived as Occupy Wall Street with its chant "Banks got bailed out, we got sold out," the movement spread to cities across the United States.

In line with Occupy's "we are the 99 percent" slogan, congressional Democrats want to pay for an extension of the payroll tax cut with a surtax on the wealthiest 1 percent of Americans.

"The payroll tax cut, we've estimated, created about a million jobs over the last year," said David Cooper, an economic analyst with the Economic Policy Institute, which also estimates that another 500,000 jobs are threatened if unemployment benefits aren't extended.

"Losing those is going to seriously hurt the economy," he added.

The news was not much better across the ocean. The European Union has been trying to plug leaks in its member nations' deficit dikes for months. Greece was the first nation to rail against EU-mandated budget cuts. Ireland, Italy and Belgium have all undertaken austerity measures, with the specter of financial implosion threatening to pull the euro zone in its undertow. England, a prime trading partner with EU nations, faced its first nationwide strike in a generation Nov. 30 as workers protested an austerity program that included cuts to retirement pensions.

In October, the Pontifical Council for Justice and Peace issued an 18-page document, "Toward Reforming the International Financial and Monetary Systems in the Context of Global Public Authority," which called for the gradual creation of a world political authority with broad powers to regulate financial markets and rein in the "inequalities and distortions of capitalist development" to counter the "selfishness, collective greed and the hoarding of goods on a great scale" discovered in the global financial crisis.

The document also called for taxes on financial transactions, with revenues contributing to the creation of a "world reserve fund" to support the economies of countries hit by crisis. Some U.S. Democrats have called for a financial transactions tax, although its chances for passage are slim in a divided Congress.

Noting that U.S. income inequality has grown in the past 30 years, Cooper said, "I can't speak specifically to the Catholic Church's influence in this discussion, but anyone who is trying to highlight the issues of extreme poverty that we're seeing, the growth in child poverty, the inequality issues like the Occupy movement that's sprung up -- all of those issues have come to the front of the public line, and that's a good thing."

END


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