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Economic amnesia

Economic amnesia

Our view • America must spend short term to save long term.

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To paraphrase H.L. Mencken, no one in this world has ever lost money by underestimating the attention span of the American people.

It is a fact worth remembering as Congress returns from its Fourth of July recess this week and continues the debate over extending unemployment benefits for 2.1 million Americans.

Perhaps instead of "extending" the word should be "renewing," inasmuch as Congress' failure to act on the $34 billion benefits extension resulted in benefits for the long-term unemployed being cut off on June 2. In Missouri, the maximum unemployment check is $320 a week; in Illinois, it's $511.

Most state unemployment insurance funds are out of money. The feds have been making up the difference since the stimulus act was passed last year. Three separate extensions have been passed, but now congressional Republicans, joined by a few Blue Dog Democrats, have decided that any further extensions must be paid for by spending cuts elsewhere in the budget.

In June, the national unemployment rate was 9.5 percent, the 14th consecutive month that it's been 9 percent or higher. But unemployment and the need to goose the economy no longer are the issues du jour. Token deficit reduction is in vogue.

President Barack Obama has appointed a deficit-reduction commission, but he seems plainly irritated that Republicans are grandstanding on the deficit issue. In the case of many of them, short attention spans have turned into amnesia.

More than two-thirds of the current deficit was created by programs enacted when Republicans were in charge of Congress and the White House, including tax cuts, the Iraq and Afghanistan wars and expanding Medicare benefits. Mr. Obama continued some of the programs, including the wars and some of the tax cuts, in addition to inheriting an economic crisis that had to be solved by bailing out banks and spending stimulus money.

"It's a little odd getting lectures on sobriety from folks who spent like drunken sailors for the last decade," the president said in an appearance in Kansas City on Thursday.

Mr. Obama argues that while deficits are a critical long-term problem, in the short term it's vital to keep the economic recovery going. That includes extension of unemployment benefits. Continued aid to state and local governments to keep teachers, cops and vital public programs intact should be the next part.

In the interest of cutting deficits, people who always are happy to tell the have-nots to have less. The banks and Wall Street have recovered nicely, if somewhat tenuously, so the argument goes that it's time for the victims of the economic collapse to do their part to cut the deficits.

Those with longer attention spans will recall that this didn't work when Franklin Roosevelt tried it in the late 1930s, and it won't work now. The economic crisis may be so 2008, but it is not over.

Huge deficits can't be reduced if the economy loses a decade to stagnation. Policymakers should do whatever it takes to get the great American economic engine humming again, banks to start lending more freely and companies to invest the $1.8 trillion in cash that they're sitting on. Doing so will help people stay in their homes.

You can't run out the clock on an economic crisis by playing political games with the lives of people. America, and Americans, deserve better than that.

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