The hard truth is that businesses are not hiring more workers because they don’t need them, or in some industries because they can’t find workers with the skills they need. The wealthiest 1 percent of Americans today control about 40 percent of the assets in our country, and have increasingly become wealthy without investing in people or producing anything. Wealth in the US during the last decade has been created largely through investment in financial assets, not in people or in productive assets.

The issue of the role of government is central here both in economic and political terms. Neither of our political parties have been proposing comprehensive solutions. They can’t even agree on the nature of the problem.

Tea Party Republicans are making the argument that the threat of marginally higher taxes or changes in regulation is what’s keeping businesses from hiring. The reality is that businesses have had to deal with the uncertainty of tax and regulatory policy for generations. President Clinton put limits on spending and raised marginal tax rates and 22 million American jobs were created. The link between marginal tax rates and job creation is iffy at best.

The question of regulation is trickier because sometimes federal, state, or local regulation of economic activity can have an impact on business decision-making. The answer is not however that less regulation is always better. Most Americans agree that we need clean air and clean water. We need orderly financial markets. We need to keep Americans safe as they travel by land, sea, and air, and safe from products that harm our health. The answer then is not unregulated markets but instead, thoughtfully and carefully regulated markets. This question of regulation is way too complex to be decided based upon simple-minded political ideology.

The greatest impediment to putting Americans back to work is the lack of demand for goods and services. The near collapse of world financial markets, and ongoing turmoil in those markets, has significantly curtailed demand in the US. We literally saw trillions of dollars in assets disappear as the bubble burst in US home prices, and the financial house of cards built upon supposedly safe “mortgage-backed securities” collapsed. The financial collapse crippled the flow of capital and credit to businesses and individuals, reduced incomes as millions of workers got laid off, and millions more lost buying power as home prices and financial markets experienced steep declines.

The American workforce collectively faces a multifaceted problem. We have too many workers unemployed, underemployed, and experiencing profound economic insecurity. Too many workers are facing foreclosure and tens of millions of homeowners throughout the US have lost equity in their homes. Mortgages that are underwater make it difficult for the unemployed and underemployed to move to where the jobs are. Too many American children are dropping out of high school and not enough of us are going to college and graduate school, especially for advanced study in subjects such as Math, Science and Engineering. Too many Americans are simply becoming expendable in the new global economic order. And it’s a problem that affects all of us.

So as we ponder America’s future on this Labor Day, how do we make sense of the state of the American worker? Is the future really that bleak? The answer is no — unless we believe it is so. We need to increase demand for American made goods, and services provided by American workers. To be more competitive, we need to invest in educating our workforce, and we need to rebuild our energy and transportation infrastructures. And we need to find creative ways to stabilize home prices.

As Americans, we need to come to our senses and stop listening to those who would have us find scapegoats for what ails us. We need to hold those who would be our leaders to a higher standard. It’s time to find specific solutions to the very real issues we confront as a nation. We need to begin rewarding hard work and responsibility again, and stop rewarding greed. We need to reflect on what we can do as a nation to rebuild an America that we can proudly leave to our children and to the generations that follow. We need on this Labor Day to begin again the work of rebuilding our country together, as Americans.

To listen to the Republicans, the Obama adminstration is creating uncertainty in our economy that is deterring private sector job creation.  It’s the government’s fault — by way of government overreach in the form of taxes that are too high, regulation that is strangling the private sector, and President Obama’s government takeover of health care in America.

Nothing could be further from the truth.  Anyone afraid to hire workers because of a few percent increase in marginal tax rates probably shouldn’t be hiring anyone anyway.  Regulation intended to protect the American people from environmental pollution and financial fraud and malfeasance will only inhibit job creation by major polluters and white collar criminals.  And the Obama health care law when fully enacted in 2014 will if anything bring a little competition into the health insurance industry and help stabilize health insurance premiums.

While they do need to be able to predict their costs, employers need even more to have confidence that consumers and other businesses will create sufficient demand for the goods and services they produce.  Economic demand for goods and services is the only real driver of job creation.

Republican propaganda notwithstanding, government bailouts and deficit spending saved the economy by propping up demand.  Without the intercession of the Federal Reserve, and the bailouts and economic stimulus by the Bush and Obama administrations in 2008 and 2009, the United States would probably have led the world into a second Great Depression.  And this second Great Depression would likely have by far exceeded the first in terms of human suffering.

The biggest drags on the economy and job creation have without any doubt been Republican threats to shut down the government and to force the government to default on its financial obligations. Republicans and their tea party allies are playing a game of chicken with nothing less than the full faith and credit of the United States. The American people better wake up, or they might one day find themselves living through not just a great depression, but the collapse of capitalism. 

Purposefully forcing the government into default by failing to raise the debt ceiling would amount to nothing less than treason.

The New Deal included a variety of government programs and initiatives that were implemented during the first and second terms of President Roosevelt between 1933 and 1938. The New Deal included relief for the poor and the unemployed and initiatives intended to help the economy recover from the Great Depression. Most importantly, New Deal reforms of the banking system were intended to prevent a recurrence of the precipitating event of the Great Depression, the Stock Market Crash of 1929.

Right-wing conservatives have since the 1930s railed against the “socialist” government policies that since that time provided what today is understood as our social safety net. That safety net is what protects workers and the middle class from the harshest impacts of “free markets” when they inevitably create hardships during economic downturns that have always accompanied capitalism. The circumvention of the most important New Deal financial reform, to impose banking reserve requirements, led directly to the meltdown of the world financial system in 2008.

New Deal programs still in effect today include a federal minimum wage, Social Security, the Securities and Exchange Commission, and the Federal Deposit Insurance Corporation. During the 1960, President Lyndon B. Johnson’s Great Society added the federal Medicare and Medicaid programs that today provide health care for tens of millions of Americans.

If this list sounds similar to the list of programs that today’s Republican Party wants to abolish, it is no coincidence. The Republican Party has been trying to undo these important safety net programs for about 80 years. The Democratic Party has successfully defended these programs in the past, but each generation of Democrats must remain vigilant against efforts to undermine the social safety net, and weaken the regulation of financial markets.

What the Republicans are pushing these days is no less than a radical departure from the social contract that has been in place between the government and its citizens for generations. Today’s Republicans have reason to hope that at long last they will be successful. Tens of millions of Americans have been convinced by conservative Republican propaganda that our government is the enemy. President Reagan’s statement that: “Government is not the solution to our problem, government IS the problem” was the first salvo in an ideological war that today threatens to leave the American people at the mercy of multi-national, corporatist capitalism.

Democrats need to engage not only with policy solutions, but with a direct response to ideological war the Republican party has been quietly waging since the 1930s. America is the great nation it is because of what we have accomplished as a people, together, to reconcile and temper the excesses of capitalism with a commitment to take care of the least among us, and provide the conditions needed for a growing and thriving middle class.

With housing prices trending further downward, this month’s jobs and unemployment report signals just how close to the edge and fragile the American economy is. Only 54,000 new jobs created in May, and a rise in the unemployment rate to 9.1 percent, signals big trouble for Americans still out of work, and for the economy as a whole. Moody’s is now warning that if the debt ceiling isn’t raised soon, it will downgrade the U.S. government’s credit rating, which could set off a new global financial crisis.

The truth of the matter is that no one is doubting the American economy’s capacity to carry the debt burden. We’ve taking on high levels of debt and successfully worked ourselves into fiscal health before. What creditors are beginning to wonder about is whether the Republicans and Tea Party fanatics are just crazy, or stupid, enough to actually force our government into default.

What’s needed is a long-term budget agreement to put our financial house in order. An agreement that will restore consumer, business, and financial market confidence. Long-term, no one in either political party believes that the government can continue to borrow 40 cents out of every dollar it spends. No one is arguing that we need to keep spending and incurring debt at current levels. A compromise on a long-term debt reduction plan needs to happen soon so that it can be implemented beginning with the government’s fiscal year 2012 budget.

However, the time to raise the debt ceiling is NOW! The May housing and jobs reports are already beginning to reflect a growing unease about whether Washington is too broken to even realize or care that we are once again moving toward the edge of a financial cliff. The Republican tactic of holding the nation’s credit rating hostage is already beginning to hurt our economy. It should never have even been allowed to go this far. It’s time to call the crazies out. What they are doing essentially is threatening to force the government to stop paying it’s bills and default on its obligations. It’s time for President Obama and Democratic Party leaders to start pinning the blame for economic conditions squarely on the outrageous debt ceiling tactics of the Republicans.

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution of the United States of America.”

The first three Articles of the Constitution then outline the rules by which we will govern ourselves, with Articles I, II, and III establishing the legislative branch, executive branch, and judicial branch, respectively.

Our founders in this way established a system of governance, with checks and balances, that requires cooperation and compromise. In order to carry out the nation’s business, two legislative bodies, the House of Representatives and the Senate, made up of representatives from every state, must first come to an agreement between those two bodies, and then receive the approval of the President, who is chosen by the people in a national election.

The Constitution itself is the only ideology we Americans need. It contains the rules that we have over the course of more than two centuries agreed to follow in attaining the highest aspirations of our nation: “a more perfect Union … Justice … domestic Tranquility … the common defence … the general Welfare … the Blessings of Liberty”.

Our Founders added a Bill of Rights that explicitly asserts our most basic human rights: freedom of religion, freedom of speech and of the press, the right to assemble peaceably and petition the government, the right to bear arms, our rights when charged with a crime, and our right to a fair trial.

These were and continue to be revolutionary concepts. Peoples and nations around the world have since yearned for what we here in the United States have asserted, through our Constitution, as basic human rights and freedom. We have seen the most recent manifestations of this yearning for freedom throughout the nations of the Middle East. We have no choice but to support and encourage the national aspirations of peoples around the world for freedom. Are there risks in doing so? Yes, but only if those aspirations fail to be realized and maintained. Truly free peoples governing themselves will never be a threat to other free peoples.

The difficult task for nations and societies throughout history is not only to attain freedom, but to do so in a way that is enduring. Our Constitution is a best practice that can be used by others to tailor one of their own.

Meanwhile, back on the home front, we need to be vigilant in the care and feeding of American self-governance. We need to be true to our revolutionary ideology and refocus on what has made the United States of America special as we continue our journey to attain a more perfect union.

What was extorted was an additional $38 billion in federal spending cuts this year that will cost jobs in what has been so far an anemic economic recovery.   But the stakes are much higher going forward.  Threats to put the U.S. government into default by refusing to raise the federal debt ceiling are a much more serious matter.   Even the threat of default could put the stability of our economy in jeopardy, and put at risk many millions of American jobs.

So what’s driving Tea Party Republicans?  Tea Party organizers and their Republican Party allies are lusting for power and influence in Washington despite their anti-government rhetoric.  Just look at the hundreds of millions of dollars that big-moneyed contributors, such as the Koch brothers and contributors to Karl Rove’s American Crossroads and the U.S. Chamber of Commerce, paid to buy Republican Party control of the U.S. House of Representatives in the 2010 elections.  There’s a Ayn Rand streak in there too, as represented by Senator Rand Paul (named after Ayn Rand) who was elected to the Senate in 2010.  The difference between moneyed Republican interests and their Tea Party friends is interesting.

Moneyed Republicans are looking for their next opportunity to control both houses of Congress and the White House and once again feed directly from the government trough as they did during the George W. Bush years.  The Randians are a little scarier.  They really do seem to want to dismantle the federal government.

What’s missing with these ideologues who are followers of Ayn Rand is that we’ve already had a taste of what limited government involvement in economic affairs looks like.  The Great Depression of the 1930s and the Great Recession of 2008 are instructive.  I wish sometimes that instead of screwing around in American politics some of these crazies would move to Somalia where Randian style anarchy reigns.

What’s also a little frustrating is the unwillingness of many Democrats to stand up directly to the anti-government rhetoric we’re hearing from almost all Republicans these days.  Obamacare is a government takeover of health care in America?  Really?  If anything it’s a compromise that was too much of a giveaway to the insurance industry.  Government regulation is strangling the American economy?  Really?  We saw what emasculated and underfunded regulatory agencies did in heading off the BP oil disaster in the Gulf of Mexico, and in heading off the greatest financial fraud perhaps ever in our history that led to the near collapse of our financial system in the fall of 2008.

And finally, we come to the most ludicrous idea of all — that wealthy individuals in the US are undertaxed.  First of all, historically they are not.  Marginal tax rates were almost triple what they are today during the golden age of capitalism that began after World War II.  And no one on the Democratic side is talking about raising marginal tax rates beyond what they were during the booming years of the Clinton presidency.  During the Clinton years more than 22 million jobs were created, and when President Clinton left office, the  budget was not only balanced but a 10-year budget surplus was projected at $5.6 trillion.

No one in their right mind can fail to understand that after heading off economic calamity in 2008-2009, our political leaders need to find a way bring the federal budget into balance.  Current federal debt projections are not sustainable.  Cutting the debt will require some significant cuts to current government spending — hopefully with as little direct impact on the middle class and the poor as possible.  

Spending cuts won’t be enough though.   Letting the Bush cuts that were never “paid for” expire would be a good start toward the balancing the federal budget.  Every dollar in tax relief as a result of the Bush tax cuts was borrowed, and will have to be borrowed year after year.   The relatively small increase in marginal tax rates that would result from letting the Bush tax cuts expire would represent shared sacrifice.  And as Oliver Wendell Holmes commented:  “Taxes are the price we pay for civilization.”

So in the end, what’s really at stake in finding a rational way forward in managing the federal debt?  What is that we should all be standing up for?  It’s no less than standing up for our American way of life.  An America with a thriving middle class.  An America in charge of its own destiny.  An America that provides a social safety net for its citizens when they fall on hard times.  And an America that provides quality health care and a retirement with dignity for all Americans.  It’s time to fight back against the extortionists.

Our airwaves are being bombarded with “End of America” propaganda, and gold buying scams based upon gloom and doom scenarios in which America is left as little more than a third-world republic. And this week, we are hearing disingenuous rantings about how America looks weak because we waited too long to intervene in Libya, or because we don’t have the resolve to assert our right to take out the Libyan dictator.

In the coming weeks, right-wing politicians will continue talking down the economy, and pushing for aggressive state and federal budget cuts that will cost hundreds of thousands of American jobs, and are intended to slow economic growth just enough to make President Obama more vulnerable when he seeks re-election in 2012. The open question is whether the American people will see through this shrill, right-wing, corporate-funded propaganda, or continue to be manipulated through fear.

And what this clearly demonstrates is that a fearful electorate can be easily manipulated by a corrupt and self-serving political elite.  The most recent targets of anti-government forces are American unions, especially public sector unions.  Why, you ask?  It’s a political calculation.  Deny unions the ability to organize and collect union dues and you rob the Democratic Party of a major source of political campaign funding and muscle.

And how are they turning American workers against unions?  Through something that can be characterized as “union envy”.  Recent surveys suggest that union workers tend to be more educated, and earn 27% more than non-union workers. Union members often also have the pensions and health insurance benefits that millions of non-union workers no longer have.  The conservative, tea party narrative leads many to ask the question:  “Why should they have something I don’t have?”  And that’s exactly the wrong question.  The real question is why we don’t all have what union members have.

The answer is that powerful, special interests have taken over important government institutions, and turned them against the American people.  Tax cuts for the wealthiest Americans seem to be winning out at all levels of government (federal, state, and local) over services such as health care, education, and infrastructure that are important to the middle class. A government that cares about people would dedicate itself to creating the conditions needed to grow the middle class, not allow more and more wealth to be concentrated in the hands of the few.

There is plenty of wealth to go around. Americans should all receive high quality health care, should have a decent place to live, and enough food to eat.  Americans able to work should be paid a livable wage, and should be able to trade pay for benefits as many union members have done, to opt for the health insurance, child care, pensions, or anything else they need.   The point is, we should collectively be figuring out how to make the lives of American families better, not turning on one another.  Misery may love company, but in the long run, wouldn’t we all rather see to it that each of us has a shot at not being miserable?

It started with opposition to the Recovery Act, and Republicans succeeded to the extent that many of the compromises limited the stimulus effect contained in the final legislation.  Way too much of the Recovery Act stimulus was in the form of tax cuts, and too little went to create jobs.  President Obama won the battle to save the American automobile industry, but that didn’t stop Republicans from trying to turn saving General Motors and Chrysler into something sinister.  Millions of American jobs were saved and the American automobile industry is profitable again.

Fortunately, the Federal Reserve is independent and strong enough to shrug off the political attacks that Republican zealots in Congress have been making to try and undermine that independence.  Republicans have criticized every effort made by the Fed to revive the financial system.  Fed interest rate policies and activities in buying back U.S. Treasury debt are helping to fuel economic recovery, and the truth is that the actions of the Federal Reserve have since 2008 literally saved the American economy.

Now State Governors are getting into the act and pretending that somehow teachers and other public sector employees are making unreasonable demands in asking State governments to make good on commitments rather than give those same dollars to the wealthy in the form of tax cuts.

The recent legislation passed in the House of Representatives to fund the federal government for the remainder of fiscal year 2011 cuts $61 billion, and the Republicans are pressing for $4 trillion in cuts and benefit reductions over the next decade.  Some surprising people have been weighing in to point out how damaging these cuts will be to job creation.

Mark Zandi, economic adviser to John McCain during the 2008 presidential campaign, last week estimated that the $61 billion in cuts proposed by House Republicans for fiscal year 2011 would slow economic growth and could lead to the loss of 700,000 jobs.

Federal Reserve Chairman Ben Bernanke agreed that there would be slower growth but estimated the job losses at only 200,000 jobs.  However, Bernanke went on to say:

“We need to address the deficit.  That’s very important … but I think it would be most effective if we did that over a time frame of five or 10 years and not try to do everything immediately.”

President Obama’s proposed fiscal year 2012 budget outlines 10 year budget savings of $1.1 trillion, according to the Congressional Budget Office, and would achieve $33 billion in savings in fiscal year 2012.  Among the reductions, painful cuts in low-income heating assistance, and cuts in grants to states for things like airports and water treatment plants.  The president’s proposal would also freeze non-security discretionary domestic spending for five years, and includes a two-year pay freeze for federal non-military employees.

President Clinton curbed federal spending early in his first term and raised marginal tax rates on the wealthiest individuals. The result was the creation of 22 million jobs during his 8 years in office, and he left a projected $5.6 billion surplus to President Bush. It’s time to tighten our belts alright, but not at the expense of already stressed middle class American families. Those who can afford to kick in a few more tax dollars need to be asked to do so long before we lay off public sector employees, and further reduce government programs that help the poor and grow the American middle class.

The answer to this question has mostly to do with another even more fundamental question — about what kind of America we want to live in.  Greed, corruption and outright fraud committed on Wall Street resulted in the collapse of our financial system and the implosion of housing prices.   Millions of Americans lost their jobs and their homes, and many millions more struggle to make ends meet.

State governments were spared financial calamity by federal government Recovery Act payments for the past two years.  With federal subsidies to the states ending later this year, state governments are cutting services for the poor, going after the pay and benefits of teachers and other public employees — but are still making good on many, many billions of dollars of obligations to financial institutions.

Congress enacts hundreds of billions of dollars in tax cuts for the wealthiest Americans while State governments lay off teachers and cops and firefighters.  Congressional Republicans are calling for austerity while the economy suffers from weak demand and anemic job creation.  Banks got bailouts and are again making enormous profits while homeowners get foreclosed on, and have seen huge declines in the value of their homes.

Well, it’s time to change the narrative.  The government has been living beyond it’s means but it has done so largely to benefit the wealthy.  Where are the bailouts for middle class families who have lost their jobs and homes?

Middle class families need help to stay in their homes, pay for the health care they need, and send their children to college.  Why not a moratorium on foreclosures and and easing of bankruptcy laws to help those who fall on hard times?  Why not college subsidies for the middle class, and college loan forgiveness plans to ease the burden of crushing education loan debt on middle class graduates.

Is the America we want to live in really a place where the concentration of wealth in America now rivals that of many “banana republics”?  Where the top 1 percent account for 24 percent of the nation’s income?  Why not an end to tax subsidies for capital gains, or an end to taxpayer subsidies for obscene corporate CEO and executive compensation?

In the end, the question is whether freedom in America should be limited to the freedom to get extremely wealthy without government interference, or whether government should invest in its people again and help ensure that the American Dream includes a livable wage and standard of living for all Americans.