By William C. Shelton

(The opinions and views expressed in the commentaries of The Somerville News belong solely to the authors of those commentaries and do not reflect the views or opinions of The Somerville News, its staff or publishers.)

I watch politicians and pundits pour over each new economic indicator like seers examining the entrails of sacrificial goats, and I don’t know whether to laugh or to cry.

I need only examine federal fiscal policy to offer this forecast: U.S. economic growth and employment will not significantly improve, and may well worsen, for years to come.

The longer that the Tea Party bullies, the saner Republicans whom they intimidate, and their Democratic enablers embrace ideology over reality, the less likely it is that the U.S. economy will ever achieve the formidable strength that it once enjoyed.

In today’s economy, every element of their prescription—tax cuts for the well off; sharply reduced government spending; disinvestment from infrastructure, small businesses, technology development, education, and training; and reduced corporate regulation—will make the patient sicker.

In their catechism, tax cuts will stimulate investment by the wealthy, spurring economic growth and increasing employment.

Multibillionaire Warren Buffet has been America’s most successful investor for close to two decades. He writes, “I have worked with investors for sixty years, and I have yet to see anyone—not even when capital gains rates were 39.9 percent in 1976-77—shy away from a sensible investment because of the tax rate on the potential gain.” He advocates increasing personal income and capital gains taxes on wealthy households.

During the Reagan Years, the top marginal tax rate dropped from 70% to 28%, and the U.S. experienced what was then the worst job growth since World War II. This, even when accompanied by the stimulus of deficit spending that doubled the national debt.

During the Clinton administration, the top rate went up to 39.6%, and the economy added 22.7 million jobs. At the end of his presidency we had a budget surplus, and the Congressional Budget Office was projecting that we would pay down the entire federal debt in 10 or 15 years.

Bush and his Republican Congress reduced the top rate to 33%. During his 8 years the country lost 670,000 jobs. The average American’s income shrank by 6%.

His administration undertook two wars. He and the Republican Congress did not institute a war tax as was done during World War II and the Korea and Vietnam conflicts. They asked no one to sacrifice, other than combatants and their families.  Tax cuts for the wealthy, two unfunded wars, and an unfunded new Medicare drug benefit produced a 47% increase in the national debt.

Those who voted for obscene deficit spending at that time, when budget discipline was easiest and most desirable, demonize those who advocate fiscal stimulus now that it is most needed.

In times like these, no entity other than government can get an economy moving. If you believe that the private sector will save us, consider that large U.S. corporations are sitting on $2 trillion in cash, while Republicans want more corporate tax cuts.

During the 1950s and early 60s, the top personal tax rate bracket was 91-92%.  Supported by these revenues, the G.I. Bill and other education subsidies prepared workers for the jobs of the future. Massive investments in the interstate highway system and every other significant infrastructure component provided a material base for economic growth. There followed the greatest economic expansion that the world had thus far seen.

I can’t think of a major new job-creating industry that emerged during my lifetime without initial federal funding. In 1950, Texas Instruments invented the microchip. Over the next ten years, the U.S. government bought 100% of microchip production, supporting its commercialization and the subsequent creation of several industries.  The story is the same with mainframe computers.

The federal government funded creation of the Internet. It provided critical support to GPS technology and biotechnology. But conservative theology states that government should have no such role.

For reasons of cost, efficiency, and talent, the U.S. is losing major industries. Our universities and entrepreneurs are creating the technologies of the future. But without government support, we are losing the industries of the future.

China is targeting one growth industry after another, investing in its research and development, and educating the workers who will staff it. Modern solar panels were invented in the U.S., but every one now sold here comes from China, which is leading the development and production of wind turbines as well.

There is no argument that America’s infrastructure condition is the worst among developed countries. China is pioneering mass high-speed rail development. This emerging industry could create hundreds of thousands of working class jobs in the U.S. and produce billions in export dollars.  But conservatives rebuffed Obama’s proposal to invest in its development.

Small businesses are the nation’s job-creation engines. Obama’s 2012 budget cuts the Small Business Administration in half.

Those who say that we must deal with the budget deficit before focusing on job creation have it backwards. Without additional federal revenue, it will be impossible to solve the deficit problem. Without job growth, there will be no revenue growth from income taxes. And without economic stimulus from the only entity that can provide it, there will be little or no job growth.

In February 2009, U.S. economic growth was -6.7%. Congress passed a feeble economic stimulus bill that month. One year later, growth was up to 3.9%. (The 65-year average is 3.3%.) Without continued stimulus, growth has now declined to 1%.

This repeats history. When Franklin Roosevelt took office in 1933, the unemployment rate was 27%. He proposed and Congress passed an enormous stimulus program. By 1937, unemployment had declined to 14.3%.

But under conservative pressure, in 1937 he sought to curb spending and balance the budget. In 1938 unemployment shot up to 19%. He pushed through Congress a large increase in stimulus spending, and unemployment declined to 14%.

Since the Great Depression, there has never been a time when stimulus spending was more urgent. Nor, with ten-year Treasury bonds at 2.1%, has there been a less costly time to do it. The cost of not doing it will be far greater.

The last element in the right wing’s economic prescription is decreased corporate regulation. Forgetting the lessons of the Great Depression, politicians deregulated financial services in the 1990s, setting up 2008’s global financial meltdown and today’s continuing aftermath.

But it really wasn’t a global meltdown. China, India, and Brazil, who are not irrational about government economic involvement, had a bad quarter or two. While their economies were growing last year at 10.3%, 10.4%, and 7.5% respectively, Republicans were doing everything they could to weaken the Wall Street Reform and Consumer Protection Act.

They are now doing everything they can to undermine its implementation. So existing regulations still cannot prevent events like the Savings-and-Loan crisis of the late 1980s or the 2008 meltdown.

Even without such future catastrophes, we are at risk of what CNN’s and Time Magazine’s Fareed Zakaria calls a “lost generation,” with lost skills, lost work habits, and lost hope.

Until Americans elect politicians who pay more attention to reality than to political calculations and demagogues, we have more to lose.