See other Editorial Articles
Title: ‘No Deal’ Republicans Map Disaster of Own Making
Source:
Bloomberg News
URL Source: http://www.bloomberg.com
Published: Mar 4, 2009
Author: John Berry
Post Date: 2009-03-04 11:51:27 by war
Keywords: republicans, economy, stimulus
Views: 258
Comments: 31
March 4 (Bloomberg) -- Republicans are headed for a political disaster of their own making. As bad news about the economy gets ever worse, the party of growth, markets and business is opposing every effort by President Barack Obama to shorten the recession and put people back to work. Congressional Republicans have crowed about their almost- unanimous nay vote against Obama’s $787 billion stimulus package. They say the money will be wasted, add to the national debt and do little to help promote economic recovery. They are wrong. There’s every reason to think the added spending and tax cuts will slow the sharp contraction in economic growth and then speed the ensuing recovery. The claim that governments can’t boost growth -- because, as this theory goes, anything they spend reduces resources available to the private sector -- is bogus. Some officials in the British Treasury made the same claim during the Great Depression to counter John Maynard Keynes’s argument that added government spending was needed to fill the gap left by the big drop in private consumption and investment. The U.S. economic boom produced by World War II spending buried this view. You have to wonder why Republicans exhumed this discredited theory. Now that they have, all that’s needed for a spectacular Republican failure is for a solid recovery to start before the mid-term elections in November 2010 -- a highly likely prospect. By then, after two years of opposition to Obama’s efforts to make the lives of most Americans better, it shouldn’t be hard to convince voters that Republicans are an uncaring lot. Polls show that almost two-thirds of Americans believe the Republican opposition is nothing more than an attempt to gain political advantage. Shrinking Ranks If those feelings persist, the Republican minorities in the House and Senate will be even smaller after the next elections than they are today. The all-out opposition to Obama is more than a political calculation that may backfire. It’s an attempt to rewrite history. For when times are tough, even many conservatives look to the government for help, as President George H.W. Bush found when he ran for re-election in 1992. During the 1990-1991 recession, conditions weren’t close to as bad as they are today, and a recovery had begun before the election. Still, there was a widespread perception that Bush didn’t understand or care about the suffering of Americans when times were hard. The message was delivered in the 1992 New Hampshire presidential primary when Pat Buchanan got more than a third of the vote against the sitting president. I remember several conservative voters telling me they would vote for Buchanan to send Bush a signal about their unhappiness with his economic policies. Less Stimulating Republicans weren’t able to block the Obama-backed stimulus bill. Still, their obstinacy in the Senate limited its effectiveness. To win just the handful of Republican “yes” votes needed to pass, the bill had to include a provision preventing the alternative minimum tax from affecting a wide swath of middle-income taxpayers. That meant $70 billion -- almost 10 percent of the total measure -- wouldn’t provide any stimulus at all. Just think about the dire state the financial system would be in today if Republicans had succeeded in defeating the Troubled Asset Relief Program last year. Without TARP money to shore up some big banks, the financial system would be in far worse shape than it is now. In case you’ve forgotten: Even after the failure of Lehman Brothers Holdings Inc. in September shocked the world’s financial system, many Republicans -- and some Democrats -- refused to vote for the $750 billion in TARP funds. Doctrinaire Freshmen A closer look revealed a telling discrepancy. A large share of the House Republicans who were retiring voted for it; none of the freshmen Republicans did so. The younger, more doctrinaire members weren’t moved by concerns about what might happen to the financial system without the TARP money. The older, retiring members felt less bound by conservative orthodoxy. No one likes bailing out banks or other financial institutions. Some, though, really are too big to be allowed to fail. Republicans and Democrats alike have to accept that fact. If it takes hundreds of billions of dollars worth of taxpayer money to keep Citigroup afloat -- and it already is -- then the money has to be available. Citi has almost $1.8 trillion of liabilities and a vast array of deals with other institutions, companies and individuals around the globe. Its failure could create doubts about the creditworthiness of many of those other parties, undermining the world financial system. It’s fine to worry about the cost to taxpayers of risking their money on bank rescues or raising the government’s annual deficit and long-term debt. Just be sure to consider as well the value of lost jobs, personal income and tax revenue if the Obama administration were to rely on the advice of those who argue it should do little or nothing. That cost would be far, far greater.
Post Comment Private Reply Ignore Thread
Top • Page Up • Full Thread • Page Down • Bottom/Latest
#1. To: war, all (#0)
Why stop the spending at a trillion if it's so good for us? Lets bump it up a few times and get 3 or 4 times the growth. That the ink is worth more than the paper the money is printed on should stop progress.
See what you did???? You spoiled the whole tenor of the story. The historical fact that no one has ever spent themselves into truly prosperous times spoils the authors diatribe. If spending was a cureall, I would be out today, borrowing money and buying all kinds of goodies.
The premise is as nutty as the Ds who grovel at the feet of the Black One.
That's factually impossible: Obama's proposals, if implemented, cannot possibly have any other effect than to lengthen the depression and cause a net reduction of employment in productive activities.
They are wrong. There’s every reason to think the added spending and tax cuts will slow the sharp contraction in economic growth and then speed the ensuing recovery
#2. To: Jethro Tull (#1)
Why stop the spending at a trillion if it's so good for us? Lets bump it up a few times and get 3 or 4 times the growth. That the ink is worth more than the paper the money is printed on should stop progress.
#3. To: Cynicom (#2)
#4. To: war (#0)
As bad news about the economy gets ever worse, the party of growth, markets and business is opposing every effort by President Barack Obama to shorten the recession and put people back to work.
 | "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." -- C. S. Lewis |
#5. To: Cynicom (#2)
How do you explain WWII? The 80's?
The historical fact that no one has ever spent themselves into truly prosperous times spoils the authors diatribe.
#6. To: sourcery (#4)
If only because he may have proposed too little spending...?
Obama's proposals, if implemented, cannot possibly have any other effect than to lengthen the depression and cause a net reduction of employment in productive activities.
#7. To: war (#0)
The one thing that is universal among all partisan tools, like you war, is that you're about 1/10th as bright as you believe yourselves to be and about 1/50th as witty. Sad
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen.”—Samuel Adams 
#8. To: Rotara (#7)
Possibly. But it still puts me at quite an exponential advantage to you. I try to promote a point of view with reason and logic. You, on the other hand, are like that little yip dog panting and following behind "Spike"...
The one thing that is universal among all partisan tools, like you war, is that you're about 1/10th as bright as you believe yourselves to be and about 1/50th as witty.
#9. To: war, rotara (#8)
Utter nonsense... A few days ago you had utter disdain for commonly held knowledge, because it was common knowledge of which you were entirely bereft. Instead you had only snide remarks, nothing of intellectual value, nothing.
I try to promote a point of view with reason and logic.
#10. To: Cynicom (#9) (Edited)
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen.”—Samuel Adams
#11. To: Cynicom (#9)
How many times must I call you on this lie? +1 more I guess, eh?
A few days ago you had utter disdain for commonly held knowledge, because it was common knowledge of which you were entirely bereft.
#12. To: Cynicom (#9)
The Obama tool has an equally poor grasp on history as he does on economics. WWII required our now long gone manufacturing base to run at full capacity x 5 years. At the end of the war, the Marshall Plan spending build new markets for these manufactured goods, thus keeping prosperity flowing via exports. This prosperity began to slowly change when Nixon took us off the gold standard and opened up China as a future free trade partner. Globalization was complete when NAFTA/WTO were laid on the backs of middle class. The trade deals and the flood of illegals has made the current American economic model unsustainable and no amount of deficit spending will save it. The 25% drop in the market since Obama's coronation is the sound of evaporating wealth thanks the the very scheme the author of this article is promoting.
#13. To: war (#11)
Lie??/ what lie???/
#14. To: war (#5)
The 80's? Explain the trillions of dollars of debt as "prosperous".
How do you explain WWII?
#15. To: Jethro Tull (#12) (Edited)
-- Being moderate means never having to say you are a liberal. -- Being moderate means rejecting the idea that we are all doomed in favor of the idea that we are only half doomed. -- Being moderate (as a cynical politician once observed) means dismissing the radical idea that Washington D.C. should be razed to the ground tomorrow, in favor of the idea of doing it one building at a time. -- Being moderate means being willing to swap a value for a victory. -- Being moderate means suing tobacco companies for killing people while voting for subsidies for tobacco farmers. -- Being moderate means raising the flag of surrender only to half mast.
Somewhere I wanted to tell you whatg a moderate politician is.
#16. To: war (#6)
No. The more spending he does, the more poverty he creates. Fiat money is not wealth. Nor does redistributing wealth from those who are good at producing it to those who are only good at consuming it have a net positive effect in the long run. Ever hear of "eating your seed corn?" That's what collectivism does. Eventually, socialism runs out of other people's money.
| "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." -- C. S. Lewis |
#17. To: Cynicom (#13)
The lie that I had fled that thread when I clearly sbhowed you that I had several posts beyind yours all addressed to you and which you ignored as well as the fact that I showd surprse at NOTHING. That lie...
Lie??/ what lie???/
#18. To: war (#17)
Tell you what. I am not interested enough to go looking for any such.
That lie...
#19. To: Cynicom (#14)
Name the last year that the US was nOT in debt...
Explain the trillions of dollars of debt as "prosperous".
#20. To: Cynicom (#18)
Chuckles... You come on here and accuse me of something that is patently false and then when you get called on it you feign disinterest.
am not interested enough to go looking for any such.
#21. To: sourcery (#16)
Can you please offer some proof of that statement?
No. The more spending he does, the more poverty he creates.
#22. To: war (#21)
war: Can you please offer some proof of that statement? Certainly: The money the government spends comes from only two possible sources: 1) Taxes: In this case, the government takes money from those who are net wealth producers (they must be, otherwise they wouldn't owe taxes,) and redistributes it for the benefit of those who are not (otherwise, they wouldn't meet the means test.) Such redistribution of earned wealth from those who have proven to be willing and able to act as net wealth producers to those who have proven otherwise has the net effect, over time, of consuming wealth, and failing to wisely invest it for the future. 2) Debt: In this case, there are two possibilities. One is that the debt will eventually be repaid using tax money--in which case, the first scenario applies. The other is that the debt will be extinguished by "monetization," which is simply creating fiat money out of nothing. Fiat money creation creates no new wealth. Worse, it devalues the savings of the everyone in the society, which destroys the capital base of savings required to grow the economy (and unjustly robs savers of their property.)
sourcery: The more spending he does, the more poverty he creates.
| "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." -- C. S. Lewis |
#23. To: sourcery (#22)
Maybe you misunderstand the meaning of the word "proof"? According to you, output never increases when the givernment taxes and or spends.
#24. To: war (#21)
This is a typical example of your confrontational "discussion", never adding anything of value. I never bozo anyone, just ignore because they add nothing of interest. You are on several ignore lists already, I hope you enjoy being held in disdain.
Can you please offer some proof of that statement?
#25. To: war (#23)
Our government is a net consumer, not a net producer. The purpose of government is not to create wealth, but to preserve and protect it. That's why it is such an abomination when it uses its taxing power to steal from the productive in order to pay the unproductive for their votes. As brilliantly explained by Bastiat in his immortal essay, The Law. Governments are terrible wealth producers. They can do it, just not well. If you can prove otherwise, go right ahead.
According to you, output never increases when the givernment taxes and or spends.
| "Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience." -- C. S. Lewis |
#26. To: war (#0)
The author's full name is John Dingle Berry.
No place is better than Turtle Island.
#27. To: war, All (#20)
No place is better than Turtle Island.
#28. To: sourcery (#25)
That can be said of almost any service provider save those in the construction industry. FedEx "produces" nothing. Neither does an airline. What they can do is facilitate commerce. Government "consumes" less than GDP...when you read your missives, you seem to be of the belief that it comsumes more. It doesn't. Of the three systems of the last 150 years, the Keyensian model has far outperformed supply side and lassie faire.
Our government is a net consumer, not a net producer.
#29. To: Turtle (#27)
Stay away from the mirror.
#30. To: sourcery (#25)
I had a discussion about Bastiat a few months ago on LP. My comments ar ethe one;s not italicized. 30. To: tpaine (#22) Frederic Bastiat remarked that "-- socialism is a system where everyone attempts to live at the expense of everyone else. --" Given protectionism, communism and socialism, which did Bastiat consider the least intrusive - or to use his term - required the least amount of Legal Plunder? The problem, here, TommyBoy is that you're a uni-dimensional thinker in a multi- level world. What you probably slept through when you came across Bastiat, is that he was an altrusitic anarchist. "All law is 'negative'". He specifically rejected the Rousseaian concept that man is bad - a concept embraced by the founders in constructing the framework for our government leaving it for later generations to judge itself. Rousseau believed that ALL men must be able to participate in governments and markets or that the natural tyranny of the empowered will overtake the lives and labors of the others. Bastiat not only rejected that but believed that philosophy to be wholly false..."centuries behind" is how I believe he characterized it. As philosophy, Bastiat was a great thinker amd I actually agree in principle with some of what he believed. But, for practical application in a muti-tiered world, his theories are basically crap because he advocated consciously from a place of cognitive disequilibrium. We're not all educated. To Bastiat that isn't an issue. Yet, it's a basic truth that historically all tyranny is rooted in the educated class dominating the uneducated. Bastiat mentions this but glosses over it with a no solution and leaves it with an "Oh well." It is at the same time also a system of disguised forced labor Any and all labor is forced. Capital formation is the least labor intensive work possible. Van Mises was a capitalist who had no problem with writing about profitting off the fruits of the investment into labor but he had a REAL problem with labor demanding a return on the investment of their sweat. e.g. Van Mises considered collective bargaining as a "violent" assault on the market but that it was okay for the market to set a price for goods but that labor, itself, couldn't be a market. TO me that's a fatal flaw. It is this element of compulsion that enables a few—those who hold and gain from the legal monopoly—to live in society at the expense of the many. We are all compelled in one way or another toward the same single element which isolates us from the other...Van Mises would have called it praxelogy, i.e., the pursuit of satisfaction or that humans are "satisficers" but instead of satisfaction, I believe that we all seek survival. The concept of Crusoe Economics is just as corrupt, TommyBoy. It separates us from each other - for example - in basic elements of survial such as access to a general education and health care and, in the end, is more poisonous to a society than a system that advocates a more shared risk among us a balance of capotalism and the common weal. It's important for me to have my neighors healthy and educated. Do you care to ask me why, TommyBoy, or is it your position that ignorance and pestulance disappears when the cures thereunto are not subsidized? war posted on 2008-11-25 17:42:26 ET Reply Trace
#31. To: sourcery (#25)
A socialist will smell a rat in your argument. He might be unable or unwilling to name it -- it is, after all, his own rat.
Erectus Walks Amongst Us
I will not go to Auschwitz. I have ordered the book. Da-do-run-run-run Da-do-run-run.
Top • Page Up • Full Thread • Page Down • Bottom/Latest