re: #343 garhighway

There’s politics and there’s economics. Increasing the deficit through stimulative spending is good economics right now. It’s become bad politics because of the dishonest arguments of those who want tax cuts for their own reasons.

We used to have a broad consensus in America that the government had a role to play in managing the economic cycle, so the dips were shorter and shallower. It seems like, for this election cycle, the GOP has decided to throw sound economic policy to the wind because of short term electoral concerns. That is a rather sad trade.

But I shouldn’t be surprised. If they’ll do it on AGW, everything else is chump change, isn’t it?

…but they didn’t use “sound economic policy” in passing the stimulus package. What they passed was a band-aid approach topped off with wish list items that had no effect on stimulating the economy. Even Krugman points it out in his article:

Of the roughly $600 billion cost of the Recovery Act in 2009 and 2010, more than 40 percent came from tax cuts, while another large chunk consisted of aid to state and local governments. Only the remainder involved direct federal spending.
And federal aid to state and local governments wasn’t enough to make up for plunging tax receipts in the face of the economic slump. So states and cities, which can’t run large deficits, were forced into drastic spending cuts, more than offsetting the modest increase at the federal level. …..

…while completely missing connecting the dots. We spent billions of dollars propping up economic models that were doomed to fail and anyone who couldn’t see that the cuts the states had to make this year were inevitable is either a liar or a partisan. Not to mention, a pet-peeve of mine, that tax credits aren’t tax cuts.

The argument that we didn’t spend enough is flawed. If he wants to make the argument that we didn’t spend effectively then he would be more in league with his local tea party.