Click to Enlarge
Our economy crashed after initial mandatory closures because consumer demand collapsed overnight. Millions of people sheltered at home and hundreds of thousands lost their jobs. More than 1.4 million Washingtonians have filed for first-time unemployment insurance since March as thousands of temporary business closures have become permanent.
Our economy is stuck in a destructive feedback loop — people and families who are struggling to get by spend less in their local communities, businesses have to close or lay off more workers, and the cycle continues. That’s why the only way to pull up from this spiral is to stimulate our economy and grow our way out of it.
History and data prove that knee-jerk cuts to state and local budgets during a recession only make things worse. After the Great Recession, states (including Washington) that cut spending and scaled back government investments saw prolonged recessions and slower recoveries than states that increased spending. In fact, by 2011 the states that boosted their spending during the Great Recession actually saw even higher average economic growth than their pre-recession levels.
The reason behind this is simple: cutting state budgets, slashing social services and laying off government employees only siphons more spending and more consumers out of the economy. On the contrary, increasing spending is the data-proven way to inject money back into the economy and keep cash flowing through our communities. Because people — not multi-billion dollar corporations or shareholders — are the real job creators. And when more people have more money in their pockets they spend it in their local communities, businesses make more and hire more, and we grow the economy.
Saving Washington’s families, small businesses and our economy will take a massive investment. Thankfully, in Washington we have an untapped resource that offers the perfect solution: the massive, untaxed wealth of super-rich individuals and hugely profitable corporations. We all depend on healthy communities and a thriving economy. Everyone - including the wealthiest among us - need to contribute to our shared recovery. It’s not just the right thing to do, it’s the smart thing to do for our economy.