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Originally Posted by patsfan13
Well we have spent at a record pace and it has been an abject failure.
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Compared with what?
The historically accurate way to phrase this is more complex. We spent at a record pace cutting taxes when unemployment was half the current rate. We borrowed the money to spend on unsustainable tax cuts. Then we got into a situation where we really
did need a stimulus.
Now then: the spending before the collapse was an abject failure, because it was unnecessary spending.
The spending since the collapse, to the extent that it actually was stimulative, had a purpose.
Compared with "what if", which is the only fair way to parse the "abject failure" absurdity, economists say that surprise surprise, it was a resounding success.
But it's very hard to say "Look at my successful 9.1% unemployment rate!" It only matters if you compare it with 15% or 25%.
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Think of a different approach. As Einstein said "Insanity is doing the same thing, over and over again, but expecting different results."
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You're right. Think of a different approach. Cutting taxes and keeping them low, at all times, on all levels of society, is wrong, self-destructive behavior that will never pay our bills. It is, as S&P so pointedly mentioned in our recent credit downgrade, unsustainable behavior.
Think of another approach. Work with me. Let's raise revenues. How?
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Doing the thing 'everybody' knows we should do, that doesn't work, is insane.
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What's insane is that you should know (and I think you do know,) I know, and every economist worth talking to knows, that you have two choices, unless you are going to raise taxes:
You tackle debt
You have a jobs program.
One or the other. This is what I mean about "something for nothing" on the right wing. This magical thinking that the economy is going to grow without any demand is insane. You can't cut your way to paying your past bills. So revenue doesn't magically increase just because you've let the monopoly guy buy a new monacle, and put another tranche of tax giveaway money into an offshore corporation. The monopoly guy sees no demand in the U.S. Even if he
does see it, he'll address it as cheaply as possible, i.e., through offshore labor where possible. But that's another whole argument.
There's a lot you do to fight a depression, which thanks to your teabagger buddies, we might be looking at as the next phase. Maybe, maybe not. A double dip is right back in the mainstream of outcomes now, whereas it was receding into the distance by the end of '10 (unless you counted the likelihood that the unlettered twits of the extreme right would succeed in their perhaps well-intended treason.)
Now: insisting that we tackle debt is their way of attacking the role of government, full stop.
It has nothing to do with the debt.
The debt can be analyzed very easily: We owe a bunch of money. We can all get together and pay it. That would be a 100% revenue approach.
You can't cut something in the future to pay the bills of the past.
But you can redirect ALL your spending to pay your past debt. That's the 100% "spending cut" approach.
Frankly, at present, since (as opposed to
prior to the collapse of 2-8, and the preceding recession starting in 2-7) we actually
need money in pockets, we actually
need jobs programs, etc., this is
precisely the wrong time to go for a 100% spending cuts approach.
We were on the debt warning track, but nowhere near downgrade territory, before Norquist's puppets became a fifth column attempting to destroy America from within -- and actually showed that the minority can, in fact, make national policy. Now? We've shown through their insistence on unsustainable and unrealistic fiscal "policy" that they believe in magic, not math, a viewpoint I am sure you're about to jump to the defense of.
The magic of the markets doesn't work if nobody's buying. Nobody's going to be buying if everybody's broke. Anything.
The right has made debt its be-all end-all, in a bid to dismantle the great society and new deal programs, hallmarks of a century of much-needed (and to the right, much-lamented) progress. We're now treated to the spectacle of ayn rand study group types thinking that each individual should be responsible for his own meat inspection, road maintenance, etc. It don't work like that. We have a nation-state for a reason, and it does work on the public behalf for a reason.
We tried feudalism too, didn't work.
So climb down off the cliche wagon and talk reality. A 100% cuts routine will do nothing but set this country back decades. What it will manifestly
not do is lead to a healthy economy.
"Supply side economics" has been discredited for decades. "The laffer curve" is only remembered because it was so aptly named.
Jobs or debt reduction?
There is one way to make progress on both: taxation.
Pay now, or pay later.
You can't get something for nothing. Stop with the magical thinking and get real.
PFnV
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Now, about the economy.
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