In the recent past Republicans voted for and ran up a charge for future generations of Americans a debt of over 10 trillion dollars ending fiscal year 2008. The stimulus bill aside, the U.S. will be running on a Bush/Republican budget until 2010. As of yesterday Republicans voted for increasing the federal debt, voted for more unemployment, voted for more failed banks and businesses and voted for increasing the interest on the national debt. In short Republicans voted against the American Recovery and Reinvestment Act. You really can’t blame them. The ARRA will be pasted into law with or without Conservative support. Though President Obama won the recent election with historic margins of support and the majority of the American public wants the ARRA. Most of America’s leading economists and the non-partisan Congressional Budget Office think the stimulus will work. It will combine with the average working Americans desire to work hard and make the best of bad times to a steady incremental recovery of the economy. Wait, Republicans the party of pork and corruption should vote for the ARRA because it is what’s best for the country, right? No, that is not the way Republicans think. Republicans are throwing a Hail Mary pass. They’re crossing their fingers and hoping for the worse possible economic calamity to engulf the United Sates for years. If Obama and Democrats succeed, you see, the Republicans become even more the marginal party of extremists, disconnected ideologues and kooks. For example, “Michelle Malkin – GOP holds the line: 244-188. This crap sandwich is all yours, Dems — Own it. Embrace it. Swallow it. The House version of the $1.1 trillion Generational Theft Act of 2009 is all the Democrats’ doing now.” Malkin’s party, philosophy, corruption, anti-regulation zealotry, optional wars based on lies will cost every American family ten times what the ARRA will cost. Not passing a stimulus package will lead to more unemployment and thus more lost tax revenue, plus the interests on that spiraling debt which will in turn leave the Conservative Generational Theft Act 2000-2008 costing even more. And that is just the tangible costs, the costs that a spread sheet can measure. It doesn’t count the intangibles, the ruined lives and families, but all sacrifices that must be made in the desperate race to save the Conservative movement from its fated irrelevancy. We know that right-wing zealots like Malkin, Limbaugh and House Minority Leader Boehner(R) are lying about their objections because they’ve been caught lying about the numbers. There are plenty of tax cuts in the ARRA, some think too much of the package is in tax cuts, but Cons have lied about the use of tax cuts and their effectiveness during a recessionary economy,
But as has already been endlessly hashed out in the econoblogosphere, their findings primarily applied to tax cuts that were enacted during periods when the economy was healthy. In other words, when the economy’s normal job creation engine is plugging along nicely and companies are turning profits and unemployment is relatively low, a tax cut can provide an added stimulus.
But the Romers did not find the same was true when the economy was in recession. Explicitly: “Policymakers’ efforts to adjust taxes to offset anticipated changes in private economic activity have been largely unsuccessful.”
There is an intuitively obvious explanation for this, which will be familiar to anyone who has been reading How the World Works this week. In a recessionary economy, tax cuts do not necessarily encourage consumers to spend and businesses to hire. When confidence in the economy is low, people are inclined to pay off their bills and boost their savings. Tax cuts might provide a little more cushion for consumers and businesses to wait out the storm, but they are unlikely to incite a wave of euphoric shopping.
This is very much not the type of tax cut that we are contemplating right now. Instead, what is being contemplated is a countercyclical action in an unhealthy economy designed to return the economy to normal growth. Romer and Romer are not all that keen on this type of tax cut; in fact, they argue that such “countercyclical fiscal policy is not achieving its intended purpose,” and that “policymakers’ efforts to adjust taxes to offset anticipated changes in private economic activity have been largely unsuccessful“.
It is beyond ridiculous to say that, or claim as an excuse for being against the ARRA that it will create debt. Even short term its rather small percentage increase as a percent of GDP then what Republicans have left us with. What will doing nothing accomplish – yes that 800 billion will be saved, but that penny wise at best and pound foolish in the long run. You cannot generate revenue without getting people to work. If the economy doesn’t have workers spending their income, business cannot generate profits or pay taxes to bring down the debt. The only real arguable point here is weighing the stimulus toward things like infrastructure projects, science research, etc or toward tax cuts. Obama’s tax cut package was the kind of bend over backwards concessions that Democrats always seem to be making and Republicans still said it was not enough. No tax cut would have been large enough to get Republican votes because economic recovery is not the Republican party’s goal. Their goal is to make Democratic efforts to turn the economy around fail. The media is to some extent playing along with the Right’s narrative. It might be a contest at this point. Can the Right spin loud and hard enough to get the truth buried in all the noise. Bipartisanship And The Stimulus
If you try hard, and publicly, to attract Republican support, but fail, then Republicans look like intransigent ideologues who would rather try to score political points than actually deal with the serious problems the country faces. You, by contrast, look reasonable: you tried to reach out, but your efforts were rejected.
Obviously, this only works if your efforts look serious. If Obama had gone to the Republicans and said: I propose a bill entirely made up of things Democrats really want and you really hate, but please, do join us in supporting it!, that wouldn’t work at all. But he didn’t do that. He went the extra mile. When Republicans protested about particular things, he dropped some of them …
Republicans didn’t stand up for principles about deficit spending – a claim straight from bizarro world considering their track record. They stood up for failure. They gave the average American worker the shaft in a bizarre first step to returning Conservative K-street culture and coporate welfare run amok, just the way they like it.