A conversation with Roosevelt Institute Senior Fellow Ellen Chesler on why funding for Planned Parenthood makes dollars and sense.

The Guttmacher Institute has found that for every dollar invested in family planning about four are saved. Why is that? Pregnancy is very expensive, as is raising a child, for women who can't afford it. "There is no better preventative investment than family planning," Roosevelt Institute Senior Fellow Ellen Chesler says. After all, the cost burden shifts to the public sector for children who are born into poverty.

But there's another cost that all of us feel when women are denied access to family planning: "Women can't do their jobs, create new jobs, or add to the country's economic well-being if they can't control their fertility," she points out. Women make up nearly half of the workforce and help drive the U.S. economy. If we're constantly at risk of becoming pregnant all the time, it is very difficult to do our jobs, particularly with the lack of social programs that benefit us or help with balancing work and family. "It's as important a tool to us as education and health care," she says.

Evidence of the economic impact of giving women control over their reproduction can be found around the world. There is a "demographic dividend," she says, when family planning is introduced in a developing country. Women are then freed to enter the formal economy and produce economic growth. "There is a direct correlation between prosperity and democracy," Ellen points out. The countries with very high fertility rates, such as Afghanistan, have no way to grow their economies. Ironically, one of the success stories within the Middle East region is Iran, as it has the best family planning programs in the area and is able to educate and employ its youth. "This is a way to create jobs," she emphasized. Not to mention fight the desperation that fuels the fundamentalism and anti-Americanism that threatens our national security. "It's not just an economic issue, but a national security issue," she adds.

Meanwhile, if Title X funding is eliminated in a deal to keep the government open, someone else will have to provide the services that women turn to Planned Parenthood for. "The government gets a very good deal" by contracting with it, Ellen says. "They're a cost effective provider of family planning and other services." There are entire regions of the country where there is no major provider of the services women rely on Planned Parenthood for -- pap smears, STD testing, cancer screenings, birth control -- so they go to the local Planned Parenthood. If the government has to take over all of these functions, it loses out on the portion of money Planned Parenthood raises itself by being a well-established, voluntary association. Not to mention that women either lose these preventative services, causing longer term burdens on public assistance, or must pay much more expensive providers. "One in five women will have used Planned Parenthood in her lifetime," she notes. "That's a lot. Everyone knows someone who has."

So why in the world would Republicans target Planned Parenthood and its vital, cost-saving services? Politics are front and center. Planned Parenthood, just like labor unions, not only provides services but is also a well-organized political body with the potential to mobilize voters in all 50 states. Ever since 1984 there has been a gender gap in voting every year except after 9/11, when security concerns trumped all others, and the past midterms, when economic concerns ruled. But even in the midterms, women were the ones who helped beat back the Republican tide for the candidates who went to bat for women's health. Women are the swing voters, and it drives Republicans crazy to keep losing to Planned Parenthood's supporters.

But ultimately, this tactic of attacking Planned Parenthood will fail. "Seventy percent of Americans under the age of 35 feel that this campaign is wrong," Ellen says. The demographics are split by age, with young people on Planned Parenthood's side. "The future is not what Republicans want; it's with us."

Bryce Covert is Assistant Editor at New Deal 2.0.

Economic struggles played a huge role in the founding of our country, despite some attempts to revise that history.

Edmund Randolph of Virginia kicked off the meeting we now know as the United States constitutional convention by offering his fellow delegates a key inducement to forming a new U.S. government. America lacked "sufficient checks against the democracy," Randolph said. A new government would provide those checks.

Randolph's listeners in Philadelphia in the spring of 1787 knew what he meant by "the democracy." And readers of this series probably will, too. He was talking about the 18th-century American popular finance movement, whose supporters agitated for policies to obstruct concentrated wealth and to give regular folks access to political power and economic equality. Amid depressions and foreclosures, ordinary people had long been rioting -- they called it "regulating" -- to pressure assemblies to restrain the merchant creditors, whose command of scarce gold and silver let them acquire immense wealth by lending at high, even predatory rates to the needier.

Then, with revolution against England, the popular finance movement turned its attention to changing the economic terms of American society. The 1776 Pennsylvania constitution, based in large part on ideas expressed by Thomas Paine in "Common Sense," smashed the ancient property qualification for voting and holding office. In Pennsylvania, new political leaders like the preacher Herman Husband, the weaver William Findley, and the farmer Robert Whitehill entered the assembly and began passing laws shutting down elite banking and requiring government to operate, for the first meaningful time anywhere, on behalf of ordinary people.

Democracy in Pennsylvania sent chills through elites of every kind throughout the newly independent country. Rioting for popular finance was bad enough, but rioting was temporary, spasmodic, and traditional. Debtors wielding legitimate political power to equalize economic life -- that was tantamount to a new kind of tyranny of the mob, hardly what Whig revolutionaries had fought England to gain. Neither Edmund Randolph nor other delegates of the Philadelphia convention, meeting in secret sessions in the Pennsylvania State House, felt any need for subtlety in seeking to suppress the political and economic equality burgeoning everywhere in America among "the democracy."

Present at the Philadelphia convention was the fabulously wealthy Pennsylvania financier and speculator Robert Morris, America's first central banker, no doubt licking his ample chops over the fulfillment, at long last, of his plan to wed nationhood to high finance. Yet it was the planter Randolph, not the financer Morris, who referred to "the plague of paper money," and he meant just what Morris meant. State legislatures' currency emissions and legal-tender laws depreciated the merchants' income from their loans; paper, the people's medium, built debt relief into money itself. Randolph also rued the country's difficulty in paying the investing class its interest on federal bonds. With those bonds, Morris had made private creditors into public creditors as well, swelling the domestic U.S. debt to vast proportions in an effort to connect national purpose to high finance.

Hence the need, Randolph said, for a national government with laws acting on all the people throughout the states. It's no coincidence that he also charged the delegates with repairing the federal government's military weakness. A debtor uprising in western Massachusetts known as Shays' Rebellion had marched on the state armory. That wasn't just a riot. It showed how far ordinary people might go in rejecting regressive taxes and policies giving investors huge paydays with public money. The United States, Randolph said, must be empowered to put down insurrections anywhere in the country.

So Randolph did indeed know what he meant by "the democracy," and his fellow delegates knew too. Why are historians typically so coy about the constitutional convention's financial purposes?

Sign up to have the Daily Digest, a witty take on the morning’s most important headlines, delivered straight to your inbox.

The fight over those purposes is almost 100 years old. In 1913, the historian Charles Beard published "An Economic Interpretation of the Constitution of the United States." There Beard argued that because delegates of the convention came overwhelmingly from the bond-holding class, the government they put into effect represents less a glorious triumph of republican philosophy than a rearguard action of money elites to assure their own payoffs. Beard's startling contention was that the framers acted at least as much on financial self-interest as on principle.

If that contention remains startling, we can thank an immense effort, carried out over generations, to throw out not only Beard's particular economic interpretation of the convention, but along with it any suggestion that struggles between elites and ordinary Americans over public and private finance played a role in framing our Constitution. It's not surprising that many of the popular founding father biographers routinely avoid the issue. But entire careers in academic history -- major ones, like Edmund Morgan's -- have been largely dedicated to depicting a founding generation acting with perfect intellectual consistency almost entirely on principle. Wherever self-interest did arise, Morgan suggests (in his popular book "The Birth of the Republic" and elsewhere), the nature of the founding mission was such that it enabled even greed to inspire the founders to good. In that kind of history, everyday political struggles over money between ordinary Americans and American elites just don't play.

Beard did err. A pro-Jefferson, anti-Hamilton bent led him to associate self-interest mainly with the high-finance elites; he saw the land-based, state-sovereign philosophy of many planters as tending more naturally toward democracy, and he miscast people like Jefferson and Samuel Adams as Paine-like democrats. Randolph's opening speech at the convention shows a confluence between Virginia planters and Philadelphia financiers on ending democratic finance (men who would never again agree on anything agreed on that!). As the historian Staughton Lynd has wisely suggested, citing Robert Brown in an essay in the anthology "Towards a New Past", had Beard referred less specifically to bondholding, and more generally to property-owning, he would have been standing on firm ground.

But many take Beard's errors as ample cause for heaving big sighs of relief, writing off any mention of founding conflicts over money and finance as "economic determinism," and resting easy in a certainty that, the founders' own words to the contrary, economic struggles played no important role in making us who we are as a people. "No, that's Beard," runs the objection to mentioning founding economic struggles. "Haven't you heard? Beard's been debunked."

Debunking Beard is full of bunk. Beard's leading critic, the historian and right-wing activist Forrest McDonald (he served, for example, as chairman of the Goldwater for President Committee of Rhode Island), rejected Beard's economic analysis in favor of uncritical adoration for the founders' sheer greatness. In his 1958 book "We the People", McDonald purported to dismantle Beard's argument with his own supposedly more accurate economic studies, but in a 1986 article in "The Journal of Economic History," Robert McGuire and Robert Ohsfeldt used what economists call "regression analysis" to show that McDonald set premises and drew conclusions far more tendentious than Beard's. McGuire's recent book "To Form a More Perfect Union" strengthens both the critique of McDonald and the adjustment and rehabilitation of Beard.

To men of the constitutional convention, some of our modern economic analyses might seem strangely redundant. If we know how to read them, the founders often tell us, unabashedly and in their own words, what they were trying to do. McDonald claimed that, Beard to the contrary, a multitude of interests prevailed at the convention, not just one. Well, that's true. What's striking is that despite their well-known mutual antipathies, on a well-known multitude of fateful issues those northerners and southerners, planters and moneymen, slaveholders and manumissionists, city dwellers and countrymen, nationalists and state sovereigntists meeting in Philadelphia in 1787 shared a desire even stronger than their antipathy for one another: stop the American democratic finance movement once and for all.

The fight wasn't over. But the men of the constitutional convention were making no bones about trying to win it.

William Hogeland is the author of the narrative histories Declaration and The Whiskey Rebellion and a collection of essays, Inventing American History. He has spoken on unexpected connections between history and politics at the National Archives, the Kansas City Public Library, and various corporate and organization events. He blogs at http://www.williamhogeland.com.

The way things are going, we'll have scraps -- if anything -- to spend on vital government functions.

While the Republican right carries on its budget antics in the House and the left denies there is any problem, we are allowing the most important part of the public sector to deteriorate into irrelevancy.

Let's start with some numbers, boring as that is. The Federal Government will spend $3.77 trillion in fiscal year 2011; 87% of that total -- $3.27 trillion -- will be spent on defense, the entitlements (Social Security, Medicare, Medicaid, mostly), and interest. That other 13%? The entire rest of the government? $500 billion.

Now jump forward 10 years. The President projects we will spend $5.9 trillion, or $2.2 trillion more. All of the growth will be spent on defense, entitlements, and interest. The entire rest of the government stays constant at $500 billion (no growth for 10 years) and falls to 9% of the total. This is the best overall number I can get for total public sector investment (both hard and soft). Actual infrastructure is a much smaller piece of that.

Almost everything you ever heard of involving the government is in this 13% -- going to 9% -- figure. Green technology, SEC regulation, job training, the Parks Service, the forest service, infrastructure, tsunami warnings, environmental protection, head start, the National Cancer Institute, the State Department, disaster assistance -- just to name a few at random -- are all declining or going away.

Do you think we should invest in a smart grid, or a public jobs program, or infrastructure, or public health, or healthier forests? Well, we're not going to. And my spending numbers are on the high side. The House Republicans will take my numbers down a lot.

One other set of numbers: of this $500 billion, about $190 billion is personnel costs. Over the next 10 years, these costs will grow to $230 billion. (I am assuming no increase in the number of federal employees and a 2% annual increase in pay and benefits.)

So what? This means that the total of all of our non-personnel investments is now $310 billion, or 8% of the total federal budget, and will fall to $270 billion, or 5% of the total budget. (For the record, I have no intention of dismissing the contributions of Federal employees. To the contrary, one of the great strengths of America is the quality of our public service.) G.E. employees in the 1980s called CEO Jack Welch "Neutron Jack" because when he finished fixing a company, the buildings were all there but the people were gone. This is the reverse. The people are all here, but the buildings are gone.

So what? Four questions and then four answers: What do these numbers mean? What are their consequences? Why are we in this corner? How do we get out of it?

1. These numbers mean that we will invest virtually nothing in our economy through the public sector. If you think -- as I do -- that these "rest of the government" expenditures include valuable public sector investments in our economy, then we will invest an average of slightly more than 2% annually -- and steadily falling -- for the next ten years. Just on the face of it, this is crazy. No well-run company in the world could go 10 years investing as trivial an amount as 2% annually. (And that leaves out the terminally boring issue of depreciation: if you think that is real -- I do -- then we are systematically reducing our stock of public capital every year.)

Sign up to have the Daily Digest, a witty take on the morning’s most important headlines, delivered straight to your inbox.

2. This underinvestment probably means a lower economic growth rate, a poorer, less competitive nation, and higher unemployment. I have always thought that Ben Friedman's book "The Moral Consequences of Economic Growth" should be a central part of the true progressive canon, but unless we are lucky beyond all rational expectations, you don't get growth without investment. And I believe that sustained higher growth in our private sector is in part dependent upon higher public sector investment. But we are planning the opposite. We are planning for lower investment, lower growth of productivity, and a poorer nation. We have maneuvered ourselves into a very tough corner: our public debt and deficit levels are way too high and simultaneously our public investment levels are way too low.

3. We are in this corner because our political system is frozen into a sterile and seemingly permanent quarrel between America's left and right, which long ago departed from reality. I won't waste my energy on the right. It is owned today by a group of nihilists who actively want to wreck the public sector. (For a full description of the new doctrine, read Senator Marco Rubio's piece in the Wall Street Journal, "Why I won't vote to raise the debt limit.") But the left is almost as bad -- less mean, mostly less vicious, less irresponsible but just as empty. The left lacks a coherent economic growth strategy, it is in denial about our debt and deficit levels, and it has no overall perspective on what the role and shape of our public sector ought to be. For both the right and the left, economic and budget policy are derivative. It's what is left after you do whatever is central to your agenda. By definition, this means there is no political energy remaining to do anything hard.

4. We will only get out of this corner when an administration -- it has to be the Obama administration, we can't wait -- puts forward an economic strategy that simultaneously brings our public debt issues under control and commits the federal government to a long-term program of public investment. Doing this requires both new tax revenues and reductions in the growth of entitlements and defense. I would do roughly the following:

(a) Commit to holding public debt -- over the long-run -- to a maximum of 70% of GDP. (I would live with a higher level in the next few years -- we still have a 9% unemployment rate.) This is less onerous than the Simpson-Bowles Commission, but tougher than the administration's current track.

(b) Propose new public investment for the next 10 years of 1% to 2% of GDP annually. This makes the necessary budget policy even harder.

(c) Create a new structure for this new investment so it doesn't turn into pure pork (call it a combination of national foundation and infrastructure bank); track the expenditures and report on them annually.

(d) introduce a 2% to 4% net VAT (value added tax) to pay for the investments, maybe even tied to these investments.

Will we actually do anything remotely like this? The only honest answer is of course not. Congress won't. The two ends of our political system do not inhabit the same universe and regard compromise and bargaining as evil. And there is no center -- although in further demonstration of the triumph of hope over experience, I would love to see the gang of six in the Senate, who are working with Alice Rivlin, come up with something. The only real hope is that President Obama plays the impending government shutdown rope-a-dope perfectly, wins the battle of public opinion, and then, at precisely the right moment, gives the big economic speech I suspect he already has written.

And if not, then as the joke's punch line says, "I'm gonna go find my brother Chester, cause he ain't never seen a train wreck."

Roosevelt Institute Senior Fellow Bo Cutter is formerly a managing partner of Warburg Pincus, a major global private equity firm. Recently, he served as the leader of President Obama’s Office of Management and Budget (OMB) transition team.

Even if you try to play by the GOP's deficit reduction rules you still can't grow the economy.

Ezra Klein notes that the Tea Party and austerity wing of the conservative party has won a huge victory and the Democrats have suffered a huge loss. Now that Obama and the Democrats are part owners of the argument that we need to cut the short-term deficit immediately, and implicitly that we can get growth through austerity, it's worth a second to go through how this is supposed to work and how it will fail.

The History of Our Current Path

Tim Fernholz and Jim Tankersley have a great article, "GOP Prescription: Spending Cuts and Lower Wages Equal More Jobs", where they dig into the current economic rationality behind the push for short-term spending cuts. They link to a GOP report, "Spend Less, Owe Less, Grow the Economy", which is based on an AEI study, "A Guide for Deficit Reduction in the United States Based on Historical Consolidations That Worked." And that study is based on a 2009 study by Alberto Alesina and Silvia Ardagna of Harvard, titled "Large changes in fiscal policy: taxes versus spending."

This last study has a bit of a history in the economic blogosphere. David Brooks introduced it into centrist pundit commentary with his June 2010 article "Prune and Grow," noting, "Alberto Alesina of Harvard has surveyed the history of debt reduction. He’s found that, in many cases, large and decisive deficit reduction policies were followed by increases in growth, not recessions." Centrists rejoiced! But Ryan Avent at The Economist, whose BS detector is very sharp, immediately noted that Alesina was looking at cuts "without considering the dynamics of these adjustments... There is little reason to believe that sharp fiscal adjustments in the current American context will produce growth," and that the countries Alesina cited didn't seem to match up.

Around the same time, Roosevelt Institute Senior Fellow Marshall Auerback looked at the arguments about Canada's policy in the 1990s, which was being promoted by the English government as a kind of growth-through-austerity poster child, and found that Canada's experience was primarily the result of the growth of exports and expansive monetary policy. We all noted that this kind of drunk-under-the-spotlight approach to historical examination characterized a lot of the research on this topic.

With that in mind, Arjun Jayadev and I dug into the examples Alesina used that supposedly proved the case for growth-through-austerity in "The Boom Not The Slump: The Right Time For Austerity" and found that in virtually all the cases used the adjustments were made when the economy was healthy, and in the few cases where it was not there was export-driven growth or interest rates were lowered. Shortly after that, the IMF put out a paper called "Will it hurt? Macroeconomic effects of fiscal consolidation" that was also summarized by The Economist as "Does fiscal austerity boost short-term growth? A new IMF paper thinks not": "[The IMF] finds that the typical such episode is clearly contractionary: a fiscal consolidation equivalent to 1% of GDP leads on average to a 0.5% decline in GDP after two years, and to an increase of 0.3 percentage points in the unemployment rate. Spending cuts do less damage than tax rises."

The hits kept coming. Dean Baker and CEPR took apart the argument as well in their report "The Myth of Expansionary Fiscal Austerity" (full PDF here). And Roosevelt Institute Senior Fellows Thomas Ferguson and Robert Johnson tackled this argument as part of their paper on the deficit "A World Upside Down? Deficit Fantasies in the Great Recession", where they distinguished between budget whales and minnows (more on that in a second).

I had assumed the IMF and The Economist's writing that these austerity dreams were too harsh and too contractionary (the IMF!) would cause some people to back off relying on this argument. But in December, AEI redid the analysis and now it is the core of the GOP's argument.

(Side note: So if Arjun and I didn't do the last part of our analysis where we actually dug into larger economic reality of these "growth" episodes and did it like the conservatives did it, we could be running the GOP's economic policy? Huh. I may have to consider switching teams -- you'd keep all the stuff on this blog a secret between us, wouldn't you?)

How This Is Supposed to Work, And Why It Will Fail

Picture this growth-through-austerity argument as an elaborate version of that board game Mousetrap. Turn the crank, a boot kicks a bucket, a bunch of stuff happens, the net falls. In the conservative argument, you immediately cut the deficit in a fragile recovery, a boot kicks a bucket, a bunch of stuff happens, and then we get growth, lower unemployment, and a healthier economy.

But what's the bucket and what's the stuff that is supposed to happen? Broadly speaking, we found that this argument requires one of a few specific things to happen. You can cut your way out of a recession as long as you can lower interest rates. Or export your way out of the recession. Or if you are comfortable blowing up your debt-to-GDP ratio. Or if you let unemployment skyrocket further. Or if you are a really small country. The two largest factors are interest rates and exports, and neither are available at the zero bound or in a global recession. The normal way this is supposed to occur won't work for us because none of these things are options for the United States.

Now the Republican plan has several mini-buckets that get kicked. There's the idea that we can create unemployment to reduce unemployment, which has already been taken apart. There's also the option of government asset sales and the privatization of government-owned enterprises and commercial functions to both generate government receipts and increase economic efficiency. I'm sure this will in no way will be a crony-style clusterf**k designed to make campaign contributors happy. Crony privatization worked so well in Russia, I'm sure it'll be all growth all the time here.

It Fails Its Own Theory

But here's their real argument: "[Countries] would be better off with sharp and sustained reductions in government spending because 'cold shower' fiscal consolidations send convincing signals to financial markets about the political will of governments to achieve fiscal retrenchments. This approach is viewed as more effective than cuts phased-in or scheduled for the distant future."

This is what is supposed to kick the bucket: by having serious cuts enacted early and quickly, even if they aren't necessarily important cuts, we can prove to the financial markets that we are serious about our debt. I don't think this is relevant for our situation, but even if I did, there are three major problems with this, given what the GOP (and now Democrats) are trying to do.

1. If all we are doing is changing the balance of power in our society, then this can't work. If we are cutting money for Planned Parenthood and the Special Olympics, which are the kinds of cuts we see in this budget, and then immediately offsetting them with corporate tax cuts or with extending the Bush high-end tax cuts so that they function as deficit neutral, we haven't shown the bond market that we are serious. That's what Ryan McNeely saw in New Jersey -- no smaller government, not even smaller deficits, just a rebalancing of power. Spend less on poor people, give more to rich people. Not exactly "political will" to get serious.

2. In their paper, Johnson and Ferguson discuss the idea of whale watches and the budget. If we need a "cold shower" (shock treatment!) budget cut because the bond market is worried about both the US long-term debt and our political will, then these little spending cuts aren't going to make a difference. The important interests, the whales, are things like the military budget, long-term health care costs, the possibility of another financial crash, the broken Senate, money and politics, and I'd add the cost of the guard labor necessary to keep 1%+ of the population incarcerated.

These budget cuts are entirely minnows. If we release a minnow, it'll just be eaten by a whale. If we cut funding for the Special Olympics, do we honestly not believe it'll just be reallocated to the military, or health care costs, or to tax cuts for the top 1%? And if we know this, then you can bet the bond market knows that. This theory requires the bond market to be terrified of a permanent rent-seeking hegemony of people with challenges getting to compete in sports while being recognized as equals in a public space and poor women having reasonable access to pap smears, and thus we need to smash the Special Olympics and Planned Parenthood immediately to show "political will." It just doesn't make sense within its own theory.

The current path is sustainable. Run a short-term deficit to help with unemployment. Remove the Bush tax cuts for the medium-term deficit, tinker with Social Security at some point and deal with health care for the long-term deficit. That's what credibility looks like. All this other stuff is a sideshow.

Mike Konczal is a Fellow at the Roosevelt Institute.