In the election of 1952 my father voted for Dwight Eisenhower. When I asked him why he explained that “FDR’s debt” was still burdening the economy — and that I and my children and my grandchildren would be paying it down for as long as we lived. 

I was only six years old and had no idea what a “debt” was, let alone FDR’s. But I had nightmares about it for weeks. 

Yet as the years went by my father stopped talking about “FDR’s debt,” and since I was old enough to know something about economics I never worried about it. My children have never once mentioned FDR’s debt. My four-year-old grandchild hasn’t uttered a single word about it. 

By the end of World War II, the national debt was 120 percent of the entire economy. But by the mid-1950s, it was half that.

Why did it shrink? Not because the nation stopped spending. We had a Korean War, a Cold War, we rebuilt Germany and Japan, sent our GI’s to college and helped them buy homes, expanded education at all levels, and began constructing the largest public-works program in the nation’s history — the interstate highway system.

“FDR’s debt” shrank in proportion to the national economy because the national economy grew so fast. 

I was reminded of this by the recent commotion over an error in a research paper by Carmen Reinhart and Kenneth Rogoff. 

The two Harvard economists had analyzed a huge amount of data from the United States and other advanced economies linking levels of public debt to economic growth. They concluded that growth turns negative (that is, economies tend to collapse into recession) when public debt rises above 90 percent of GDP.

That finding, in turn, fueled austerics, who insisted that the budget deficit (and debt) had to be cut in order to revive economic growth. 

But Reinhart and Rogoff’s computations were wrong, and average GDP growth in very-high-debt nations is around 2.2 percent rather than a negative 0.1 percent. 

A few days ago, the two offered a defense in an oped in the New York Times, asserting “very small actual differences” between their critics’ results and their own. 

Regardless, Reinhart and Rogoff seem to be correct in one basic respect: Economic growth does seem to be lower in very-high-debt countries. 

But the entire debate over their paper’s flaws begs the central question of cause and effect.

Is growth lower because of the high debt? That would still make the austeric’s case, even without the magic 90 percent tipping point. 

Or does cause-and-effect the other way around? Maybe slow growth makes debt burdens larger. There’s evidence to suggest this is the case. 

If so, government should be fueling growth through, say, spending more — at least in the short run. 

As we should have learned from what happened to “FDR’s debt,” growth is the key. 

Economic forecasters exist to make astrologers look good. Most had forecast growth of at least 3 percent (on an annualized basis) in the first quarter. But we learned this morning (in the Commerce Department’s report) it grew only 2.5 percent.

That’s better than the 2 percent growth last year and the slowdown at the end of the year. But it’s still cause for serious concern. 

First, consumers won’t keep up the spending.Their savings rate fell sharply — from 4.7% in the last quarter of 2012 to 2.6% from January through March.

Add in March’s dismal employment report, the lowest percentage of working-age adults in jobs since 1979, and January’s hike in payroll taxes, and consumer spending will almost certainly drop. 

Median household incomes continues to decline, adjusted for inflation. Another report out today showed consumer confidence fell in April.

Second, the recovery continues to be wildly lopsided. The only thing really keeping it going is the rip-roaring stock market. But the stock market only boosts the wealth of the richest 10 percent of Americans, who own 90 percent of stocks (including 401-K retirement accounts).

But no economy can maintain momentum just on the spending of the richest 10 percent.

Third, American exports can’t possibly pick up the slack. In fact, they’re dropping. Europe is falling into recession because of austerity economics. Japan is still a basket case. China’s economy is slowing. Much of the developing world’s economy is dependent on exports to the developed world – so don’t hold your breath for developing countries to bail us out.

So what is Washington doing? Worse than nothing. It has now adopted the same kind of austerity economics that’s doomed Europe — cutting federal spending and reducing total demand. And the sequester doesn’t end September 30. It takes an even bigger bite out of the federal budget next fiscal year.

Earth to Washington: The economy is slowing. The recovery is stalling. At the very least, repeal the sequester.

You don’t have to be an astrologer to see the dangers ahead.

“The Case Against Chained CPI”

The xenophobia has already begun.

Senator Rand Paul (R-Ky) in a letter to Senate Majority Leader Harry Reid today urged him to reconsider immigration legislation because of the bombings in Boston. “The facts emerging in the Boston Marathon bombing have exposed a weakness in our current system,” Paul writes. “If we don’t use this debate as an opportunity to fix flaws in our current system, flaws made even more evident last week, then we will not be doing our jobs.”

Senator Chuck Grassley (R-Iowa), senior Republican senator on the Senate Judiciary Committee, which is responsible for an immigration reform bill, is using much the same language – suggesting that the investigation of two alleged Boston attackers will “help shed light on the weaknesses of our system.”

Can we just get a grip? Dzhokhar Tsarnaev is a naturalized American citizen. He came to the United States when he was nine years old. He attended the public schools of Cambridge, Massachusetts, not far from where I lived.

Immigration reform is not about national security, in any event. It’s about doing what’s right, and giving the estimated 11 million undocumented immigrants in America — many of them here for years, working at jobs and paying withholding taxes, and many of them children — a path to citizenship.

It’s about making sure they aren’t exploited by employers and others who know they won’t complain to authorities. And giving their families the security of knowing that they can live peacefully and securely without fearing deportation.

That path shouldn’t be so easy as to invite others from abroad to abuse the system, and the nation has every right to demand that undocumented immigrants pay a penalty and move to the back of the queue when it comes to attaining citizenship. But the path should be reasonable, straightforward, and fair.

Other Republicans want President Obama to declare the surviving Boston bombing suspect an “enemy combatant,” in order to question him without any of the protections of the criminal justice system.

Senator Lindsey Graham (R-S.C.) says treating him as an enemy combatant is appropriate “with his radical Islamist ties and the fact that Chechens are all over the world fighting with Al Qaeda.” 

Hold it. Tsarnaev was arrested on American soil for acts occurring in the United States. No known evidence links him to Al Qaeda. He is Muslim — so is Graham really saying Muslims are presumed guilty until proven otherwise?

During the Bush administration, the Supreme Court upheld the indefinite military detention of Yaser Esam Hamdi, an American citizen. But he was captured carrying a weapon on an Afghanistan battlefield, and the Court said the purpose of wartime detention was to keep captured enemies from returning to fight, and that “indefinite detention for the purpose of interrogation is not authorized.”

Memo to the Xenophobe Party: The so-called “war on terror” is a war without end. If we arrest American citizens and hold them indefinitely without trials, without lawyers, and without the protection of our system of justice, because we suspect they have ties with terrorists, where will that end?

Our civil rights and liberties lie at the core of what it means to be an American, and we have fought for over two centuries to protect and defend them.

The horror of the Boston Marathon is real. But the xenophobic fears it has aroused are not. I would have hoped United States senators felt an obligation to calm public passions than pander to them.

We need immigration reform, and we must protect our civil liberties. These goals are not incompatible with protecting America. Indeed, they are essential to it.

My first reaction on hearing of the Senate’s failure to get 60 votes for even modest measures to regulate the flow of guns into the hands of people who shouldn’t have them, such as background checks supported by 90 percent of Americans, was to be furious at the spinelessness of the four Senate Democrats who voted against the measure (Mark Begich, Max Baucus, Mark Pryor, and Heidi Heitkamp), as well as the Republicans. And also with Harry Reid, who wouldn’t lead the fight on changing the filibuster rule when he had the chance.

The deeper message here is that rural, older, white America occupies one land; younger, urban, increasingly non-white America lives in another. And the dividing line on social issues (not just guns, but also abortion, equal marriage rights, and immigration reform) runs between the two.

Yes, I know: Plenty of people who are rural, older, and white aren’t regressives on guns, abortion, equal marriage, and immigration. And plenty who are urban, younger, and non-white are. My point is that if you want to explain what’s happening in America on these non-economic issues you have to understand what’s happening to the nation demographically — and why the demographic split is important.

Begich, Baucus, Pryor, and Heitkamp may be Democrats but they’re also from rural, older, white America. That land has disproportionate political power in the Senate, and a gerrymandered House — which may not bode well for immigration reform over the next few months, and suggests continuing battles over “state’s rights” to determine who can marry and when human life begins.

Over time, though, older, rural, white America is losing ground to a nation becoming ever younger, more urban, and increasingly non-white — a fact that threatens the former so much that it’s in full backlash against the forces of change.

We come together as Americans when confronting common disasters and common threats, such as occurred in Boston on Monday, but we continue to split apart economically.

Anyone who wants to understand the dis-uniting of America needs to see how dramatically we’re segregating geographically by income and wealth. Today I’m giving a Town Hall talk in Fresno, in the center of California’s Central Valley, where the official unemployment rate is 15.4 percent and median family earns under $40,000. The so-called “recovery” is barely in evidence.

As the crow flies Fresno is not that far from California’s high-tech enclaves of Google, Intel, Facebook, and Apple, or from the entertainment capital of Hollywood, but they might as well be different worlds. 

Being wealthy in modern America means you don’t come across anyone who isn’t, and being poor and lower-middle class means you’re surrounded by others who are just as hard up. Upward mobility — the old notion that anyone can make it with enough guts and gumption — is less of a reality.

The probability that a poor child in America will become a poor adult is higher now than it was 30 years ago, and higher in the United States than in the United Kingdom, which has a long history of class rigidity. 

Almost 1 out of 4 of the nation’s children is in now in poverty, but you wouldn’t know that in Washington, where our representatives are now busily cutting safety nets children depend on, or in many state capitals that continue to slash budgets for education and social services.

Many of America’s wealthy don’t see why they should pay more taxes to support the less advantaged because they have no idea what it means to be less advantaged, while many in America’s middle class can’t afford to pay more because their real wages continue to decline.

Our thoughts turn to Boston — as they should. But Fresno and other places like it across America remain ignored.

The biggest economic debate is between Keynesians (who want more government spending and lower interest rates in order to fuel demand) and supply-side “austerics” (who want lower taxes on the wealthy and on corporations to boost incentives to hire and invest, and who see government deficits crowding out private investment).

But both approaches have problems.

George W. Bush tried supply-side tax cuts but nothing trickled down. Jobs and wages declined. And austerity economics has been a disaster for Europe.

Unfortunately the U.S. is now adopting supply-side austerics by making the Bush tax cuts permanent for 98 percent of taxpayers, hiking Social Security taxes back up, and implementing the sequester.

I’m on the Keynesian side. Yet the biggest weakness of modern Keynesian economics is it doesn’t have a clear answer for how much spending is necessary in an economy, like ours, in which wages keep dropping and government debt keeps growing. Simply arguing “more” won’t cut it.

John Maynard Keynes urged that governments “prime the pump” to stimulate demand but pump priming has limited effect if the well is running dry.

Both sides of the modern debate have neglected the scourge of widening inequality.

We’re now witnessing what happens when all of the economic gains go to the top, and the rest of the population doesn’t have enough purchasing power to keep the economy going.

Four years into a so-called recovery and we’re still below recession levels in every important respect except the stock market. A measly 88,000 jobs were created in March, and total employment remains some 3 million below its pre-recession level. Labor-force participation is its lowest since 1979.

Businesses won’t hire and expand unless they have more customers, but most Americans can’t spend more. Last Friday’s retail sales report showed sales down .4 percent in March. Consumer sentiment has fallen to its lowest level in nine months.

The underlying problem is the vast middle class is running out of money. They can’t borrow more — and shouldn’t, given what happened after the last borrowing binge.

Real annual median household income keeps falling. It’s down to $45,018, from $51,144 in 2010. All the gains from the recovery continue to go to the top.

Widening inequality is not inevitable. If we wanted to reverse it and restore middle-class prosperity, we could.

We could award tax cuts to companies that link the pay of their hourly workers to profits and productivity, and that keep the total pay of their top 5 executives within 20 times the pay of their median worker. And impose higher taxes on companies that don’t.

We could raise the minimum wage to half the average wage.

We could increase public investment in education, including early-childhood.

We could eliminate college loans and allow all students to repay the cost of their higher education with a 10 percent surcharge on the first 10 years of income from full-time employment.

We could expand the Earned Income Tax Credit.

And we could pay for all this by adding additional tax brackets at the top and increasing the top marginal tax rate to what it was before 1981 – at least 70 percent.

But none of this will happen until the public understands why widening inequality is so damaging. Even the rich would do better with a smaller share of a rapidly-growing economy than a large share of one that’s barely growing at all.

Our political leaders in Washington have for now chosen supply-side austerity economics over Keynesian economics. That’s bad enough. Their inability or unwillingness to do much of anything about widening inequality will prove a larger problem.

John Boehner, Speaker of the House, revealed why it’s politically naive for the President to offer up cuts in Social Security in the hope of getting Republicans to close some tax loopholes for the rich. “If the President believes these modest entitlement savings are needed to help shore up these programs, there’s no reason they should be held hostage for more tax hikes,” Boehner said in a statement released Friday. 

House Majority Leader Eric Cantor agreed. He said on CNBC he didn’t understand “why we just don’t see the White House come forward and do the things that we agree on” such as cutting Social Security, without additional tax increases.

Get it? The Republican leadership is already salivating over the President’s proposed Social Security cut. They’ve been wanting to cut Social Security for years.  

But they won’t agree to close tax loopholes for the rich.

They’re already characterizing the President’s plan as a way to “save” Social Security — even though the cuts would undermine it — and they’re embracing it as an act of “bi-partisanship.”

“I’m encouraged by any steps that President Obama is taking to save and preserve Social Security,” cooed Texas Republican firebrand Ted Cruz. “I think it should be a bipartisan priority to strengthen Social Security and Medicare to preserve the benefits for existing seniors.” 

Oh, please. Social Security hasn’t contributed to the budget deficit. And it’s solvent for the next two decades. (If we want to insure its solvency beyond that, the best fix is to lift the cap on income subject to Social Security taxes – now $113,700.)

And the day Ted Cruz agrees to raise taxes on the wealthy or even close a tax loophole will be when Texas freezes over.

The President is scheduled to dine with a dozen Senate Republicans Wednesday night. Among those attending will be John Boozman of Arkansas, who has already praised Obama for  “starting to throw things on the table,” like the Social Security cuts. 

That’s exactly the problem. The President throws things on the table before the Republicans have even sat down for dinner. 

The President’s predilection for negotiating with himself is not new. But his willingness to do it with Social Security, the government’s most popular program  — which Democrats have protected from Republican assaults for almost eighty years — doesn’t bode well. 

The President desperately wants a “grand bargain” on the deficit. Republicans know he does. Watch your wallets. 

 So far, the much-dreaded “sequester” – some $85 billion in federal spending cuts between March and September 30 – hasn’t been evident to most Americans.

The dire warnings that had issued from the White beforehand – threatening that Social Security checks would be delayed, airport security checks would be clogged, and other federal facilities closed – seem to have been overblown.

Sure, March’s employment report was a big disappointment. But it’s hard to see any direct connection between those poor job numbers and the sequester. The government  has been shedding jobs for years. Most of the losses in March were from the Postal Service.

Take a closer look, though, and Americans are starting to feel the pain. They just don’t know it yet.

That’s because so much of what the government does affects the nation in local, decentralized ways. Federal funds find their way to community housing authorities, state unemployment offices, local school districts, private universities, and companies. So it’s hard for most Americans to know the sequester is responsible for the lost funding, lost jobs, or just plain inconvenience.

A tiny sampling: Brandeis University in Waltham, Massachusetts is bracing for a cut of about $51 million in its $685 million of annual federal research grants and contracts. The public schools of Syracuse, New York, will lose over $1 million. The housing authority of Joliet, Illinois, will take a hit of nearly $900,000. Northrop Grumman Information Systems just issued layoff notices to 26 employees at its plant in Lawton, Oklahoma. Unemployment benefits are being cut in Pennsylvania and Utah.

The cuts — and thousands like them — are so particular and localized they don’t feel as if they’re the result of a change in national policy.

It’s just like what happened with the big federal stimulus of 2009 and 2010, but in reverse. Then, money flowed out to so many different places and institutions that most Americans weren’t aware of the stimulus program as a whole.

A second reason the sequester hasn’t been visible is a large share of the cuts are in programs directed at the poor – and America’s poor are often invisible.

For example, the Salt Lake Community Action Program recently closed a food pantry in Murray, Utah, serving more than 1,000 needy people every month. The Southeast Alaska Regional Health Consortium is closing a center that gives alcohol and drug treatment to Native Alaskans.

Some 1,700 poor families in and around Sacramento, California are likely to lose housing vouchers that pay part of their rents. More than 180 students are likely to be dropped from a Head Start program run by the Cincinnati-Hamilton County (Ohio) Community Action Agency.

Most Americans don’t know about these and other cuts because the poor live in different places than the middle class and wealthy. Poverty has become ever more concentrated geographically.

A third reason the sequester is invisible is many people whose jobs are affected by it are being “furloughed” rather than fired. “Furlough” is a euphemism for working shorter workweeks and taking pay cuts.

Two thousand civilian employees at the Army Research Lab in Maryland will be subject to one-day-per-week furloughs starting on April 22, for example, resulting in a 20 percent drop in pay. The Hancock Field Air National Guard Base is furloughing 280 workers. Many federal courts are now closed on Fridays.

Furloughs spread the pain. The hardship isn’t as evident as it would be if it came in the form of mass layoffs. But don’t fool yourself: A 20 percent pay cut is a huge burden for those who have to endure it.

Bear in mind, finally, the sequester is just starting. The sheer scale of it is guaranteed to make it far more apparent in coming months.

Some 140,000 low-income families will lose their housing vouchers, for example. Entire communities that depend mainly on defense-related industries or facilities will take major hits.

If you thought March’s job numbers were disappointing, just wait.

With the sequester, America has adopted austerity economics. Yet austerity economics is the wrong medicine at exactly the wrong time. Look what it’s done to Europe.

Bad news on the economy. It added only 88,000 jobs in March – the slowest pace of job growth in nine months.

While the jobless rate fell to 7.6 percent, much of the drop was due to the labor force shrinking by almost a half million people. If you’re not looking for work, you’re not counted as unemployed.

 That means the percentage of working-age Americans either with a job or looking for one dropped to 63.3 percent — its lowest level since 1979.

 The direction isn’t encouraging. The pace of job growth this year is slower than its pace last year.

What’s going on? The simple fact is companies won’t hire if consumers aren’t buying enough to justify the new hires. And consumers don’t have enough money, or credit, or confidence to buy enough.

It’s likely Americans are beginning to feel the pinches of January’s hike in the payroll tax combined with the government budget cuts known as the sequester. Increases in gas prices haven’t helped. All are taking money out of the pockets of most people – whose job situation remains precarious. So they can’t and won’t buy much.

One indicator: Retailers cut their staffs in March — by 24,100.

Yes, the stock market has rebounded. But only a small portion of Americans are affected by the rebound. The richest 1 percent own 35 percent of all shares of stock; the richest 10 percent own 90 percent.

And, yes, housing prices have stopped falling, and construction of new homes has picked up. The construction sector added 18,000 jobs in March.

But the turnaround in housing isn’t because prospective homeowners have been able to get new mortgages. It’s because investors are buying or building homes to rent. And a buoyant rental market doesn’t make most people feel wealthier.

Perhaps the most disturbing aspect of all this is that we’re in the fifth year of a supposed economic recovery from the second-worst economic downturn of the past century, and we’re still not nearly back on track. Instead, we’ve had the most anemic recovery in history.

A Gallup survey released Thursday showed that the percentage of Americans holding full-time jobs has remained essentially unchanged over the past year. With 12 million people out of work and another 8 million holding part-time jobs who’d rather have full-time ones, this just isn’t nearly good enough.

We’re experiencing the burden of austerity economics and the continued scourge of widening inequality. Both are squeezing average Americans. Yet it’s impossible to have a buoyant and sustained recovery without a large and growing middle class.