This is What Austerity Looks Like

Americans Have Already Lived Through a Shutdown While Republicans threaten to bring the government to a halt, Democrats are caving in to the austerity measures they demand. Chris Lehmann This fall, as Washington geared up for the recurring spectacle of another prospective shutdown of the federal government, many Americans were experiencing a different shutdown—one already in its final stages. With the retirement of the $52 billion childcare stabilization program at the end of September, the last vestiges of the Covid-era welfare state have been expunged. Earlier casualties of America’s reversion to the old, austerian normal included the wildly popular and effective child tax credit, which netted more than $160 billion in annual tax savings for working families during the pandemic, as well as expanded Medicaid and SNAP benefits that helped to ensure that ordinary Americans could reliably access food, shelter, and healthcare during the economic perils of the lockdown. Meanwhile, during the debt-ceiling negotiations this past spring, the Biden administration agreed to suspend the Covid pause on student loan payments, plunging some 44 million Americans into renewed economic insecurity. The impact of these myopic policy decisions has been immediate and devastating. The child tax credit, in particular, helped spark a record reduction in child poverty, and its cessation at the end of 2021 caused that grim social metric to more than double—from 5.2 percent that year to 12.4 percent in 2022, according to recent census data. Look for that trend to worsen with this year’s withdrawal of federal childcare support. This baleful reversion to a Dickensian neoliberal consensus on the provision of basic income supports is a pressing material disaster for millions upon millions of working Americans. It’s also close to the textbook definition of an unforced political error for the Biden administration and the Democratic Party’s policy elite. Even as broad macroeconomic indicators such as employment and wage growth continue to support a robust overall economic picture, Biden’s poll numbers remain mired in the low 40s—a clear sign that most Americans don’t believe they’re living in a prosperous middle-class social order. Indeed, a recent Quinnipiac University poll even had a majority of respondents agreeing that Donald Trump would be a better leader in a national emergency than Biden—by a jarring 10 percent margin. “We’re seeing a withdrawal of pandemic support while inflation is still high—and when we certainly haven’t had deflation, people’s incomes haven’t kept up with that,” says Marshall Steinbaum, an economist at the University of Utah. “So this whole alleged mystery of why Biden’s poll numbers are bad—that’s laughable. A lot of people drank the Kool-Aid as to the transformativeness of this administration’s economic policies, and now they’re kind of left saying, ‘Wait, no one agrees with this grand vision I’ve conjured out of nothing?’”