A few days ago I raised the question based on a provocative American Thinker essay by Randall Hoven: How deep is this recession? Is it really the worst crisis in 70 years? I am not that well versed in – nor closely attuned to – macroeconomic data and the trends they indicate. Something seemed incomplete in the essay.
So I’m glad to see that Rossputin has weighed in with a thoughtful and thorough response, disagreeing with Hoven. Whether you are more swayed by Hoven or Rossputin, Rossputin’s conclusion is something we all should easily be able to agree with:
The Democrats’ medicine will be worse than our current illness, and will turn what should have been a moderately annoying case of the fiscal flu into a devastating economic pneumonia.
The only encouraging news is that more Americans are feeling an aversion to the toxic economic prescription.
Oh look, another post complaining about the solution with no alternative proposal presented! Where is the Republican proposal beyond tax cuts? And if there is nothing beyond that, please provide the analysis that explains how tax cuts will be spent and not saved in an economy like we’re in today? Will you be spending your tax cut if you get one?
One thing at a time.
CS: “What do you mean we should stop injecting the patient with a poison that will make him much more ill? You haven’t given any better ideas for what to give him!”
I’m sorry you missed the point of the post, but here is one major Republican proposal (mostly tax cuts) that is on the right track:
http://marcambinder.theatlantic.com/archives/2009/01/the_house_republicans_propose.php
Yes, it’s mostly tax cuts. Sure, some of the money will be used for consumer spending, but savings stimulates investment. If you don’t understand how more money in the hands of investors & entrepreneurs tends to create jobs, well, I can’t help. The plan also calls for 1% across the board cut in discretionary spending. We need to grow the productive private sector, not the federal government.
I would like to think the GOP is serious about cutting discretionary spending, but after the end of their tenure in charge of Congress, I’d say more penance needs to be done. However, the answer to tax cuts without corollary spending cuts is not massively more deficit spending.
Like I said, it’s a start. A lot better than heavy deficit spending on existing federal programs with a mostly non-stimulative effect. That does the opposite: grows the federal bureaucracy at the expense of the private sector.
Getting back to the roots of the current crisis would also require cleaning up regulation of the Fannie Mae / Freddie Mac government enterprises, and fix the harmful mark-to-marketing accounting rule (http://online.wsj.com/article/SB122282734447293049.html).
There are bad Republican ideas, too, such as:
http://spectator.org/blog/2009/02/05/the-wrong-kind-of-alternative
I like how Lee Cary put it (http://www.americanthinker.com/blog/2009/02/a_gop_defining_moment_for_10.html):
“When Republican Senators start tinkering with the details of a fundamentally bad bill, it appears as though they’ve accept the premise of its worthiness. It’s like physicians arguing over the size of the leeches needed to cure the patient.”
What the Democrats have been trying to ram through is one giant collection of blood-sucking leeches. I am disappointed to see you – a smart guy – blindly defending this approach as a “solution”, even as more & more of the general public is waking up to reality about it.
So how many jobs did the Bush tax cuts create? Where are they now? All the numbers I’ve seen show the Republican “plan” creating 1.3 million new jobs over the next year, not even keeping up with population growth. The Obama plan creates 3.7 million.
And how does “cleaning up” Fannie Mae and Freddie Mac fix what went wrong at AIG, Bear Sterns, Lehmen Brothers, etc?
“The Obama plan creates 3.7 million”: Yes, if you base your estimates on flawed speculation (http://www.heritage.org/Research/Economy/wm2252.cfm). Here’s another good, sensible alternative plan that doesn’t mortgage the future (http://www.heritage.org/Research/Economy/wm2191.cfm).
Ben, that Heritage plan basically *is* the Congressional Republican plan. That’s where I got the 1.3 million jobs number, which, as I mentioned, doesn’t even keep up with population growth. A vote for that plan is a vote for continued recession.
And the funny thing about that Romer report is that Republicans were touting Romer’s earlier research as evidence of how great *their* plan was, before several economists, including Romer herself, came out and said that they apparently read the research wrong (http://gregmankiw.blogspot.com/2009/01/obamas-multipliers.html and http://delong.typepad.com/sdj/2009/01/the-romer-view-of-tax-and-spending-multipliers-revisited.html).
In the end, this could go on forever because its the same old argument. You think the economic policies of the last 8 years are the solution to the problems. I don’t, and neither do the majority who voted Obama and Congress in. It’s boring.
But at least this time around, the Republicans have no chance of implementing their silliness. Obama gave them the opportunity to have their voices heard, and they turned around and voted 100% against the compromise plan. So much for compromise.
Congratulations! If this really is the best you have, you’ve helped persuade me (and my dozens of readers) even more that doing nothing is better policy than the current proposal. You truly are good at parroting talking points: “compromise plan”? What was the compromise? Have you paid attention to the way Pelosi runs the House?
“You think the economic policies of the last 8 years are the solution to the problems.” Not exactly. Clever straw man argument, though.
Nor does it matter much to me what people said or didn’t say about Christine Romer. Plenty of economists disagree.
You have no response to the fact that the claim of 3.7 million jobs from the Obama plan is anything more than flawed speculation.
You are right, though, that we will just end up going around and around. Because your blind faith in the power of government intervention to heal the economy – and by pouring billions into existing federal programs – is beyond rational argument. So long.
“Congratulations! If this really is the best you have, you’ve helped persuade me (and my dozens of readers) even more that doing nothing is better policy than the current proposal.”
Be sure to campaign on that in 2010. Vote Republican – Doing Nothing Since 2001!
Of course, you know the Republicans’ plan isn’t nothing. I was just favorably comparing doing nothing with your Democratic Party’s out-of-control plan.
CS: “Shut up! I know this is just a jar of giant, blood-sucking leeches. But we have to do SOMETHING for the patient … And Dr. Obama and Dr. Pelosi said this was the way to go….”