The GOP and the Politics of Economic Pain

[one...two...tree 2,762]

by Michael Cohen

(June 30) -- With the country fixated on the adventures of Gen. Stanley McChrystal and the BP spill, it's understandable that last week's most depressing news might have passed a few people by: The U.S. Senate is intent on extending America's economic misery.

Led by all its Republican members and Democrat Ben Nelson of Nebraska, the Senate is filibustering a bill that includes, among other things, emergency jobless benefits. As a result, 1.2 million Americans have seen their checks cut off since June 2, a figure that could rise to 2 million over the next week.

Failure to pass this bill will do more than hurt the unemployed -- it will actually cost jobs. Twenty-four billion dollars in Medicare funding would have helped state legislatures plug their budget gaps. Without it, states like Pennsylvania will have to cut funds for substance abuse and homelessness programs and scale back funding for child welfare by one-quarter, among other steps, according to a report from the Center on Budget and Policy Priorities.

Colorado will likely have to eliminate state aid for full-day kindergarten. In Arizona, funding would be cut for state courts. And in New Mexico, fewer funds will be available for emergency hospital services. An estimated 200,000 jobs could be lost as a result.

Why is the Senate purposely hurting the unemployed -- and dealing another blow to the country's economic renewal? Well, there's the stated reason and then the real reason.

The stated reason is the deficit. As the country's budget gap has grown, Republicans and some centrist Democrats have used the country's growing red ink as an excuse to resist any measure that calls for expanding the deficit.

They argue it would be morally wrong to stick America's grandchildren with a price tag of long-term debt. As Sen. Scott Brown, R-Mass., put it, "Increasing the deficit and raising taxes is not what Americans are looking for from their elected leaders in Washington."

It's a bit hard to stomach this sort of anti-deficit mantra, particularly when it comes from Republicans who had no such qualms when it came to cutting taxes in 2001, repeatedly voting for Iraq war supplementals or passing a $700 billion package to add prescription drug benefits to Medicare -- with zero offsetting spending cuts.

But the real immorality of Brown's statement -- and much of the current deficit talk -- is that it seems to ignore the plight of actual children today. Indeed, his argument is akin to saying that firefighters should let a house burn to the ground rather than risk wasting water.

The simple fact is that deficit spending is undoubtedly the most effective short-term way to get the country out of its economic slump. Indeed, this is Keynesian economics 101. As we saw with last year's economic stimulus package, which boosted the country's gross domestic product, created more than 2 million jobs and prevented a far worse economic downturn, this sort of approach pays real dividends.

And the best antidote to today's budget deficit is a growing and vibrant economy. This would not only help millions of Americans but the increased tax revenues that come from such strong economic growth would likely shrink the deficit.

The fact that Democrats like Ben Nelson, Independents like Joe Lieberman and other centrists have opposed a further stimulus as well is perhaps more an indication of political expediency than actual ideological belief. But it gives one a sense of how backward America's political discourse has become -- that expanding the deficit is seen as a greater political liability than doing nothing in the face of 9.7 percent unemployment.

Now of course Republicans will always prefer a tax cut to more government spending. But the principle is the same -- pumping money into the economy, even at the price of increasing the deficit, is the right thing to do at times of economic malaise. Unless, of course, the other party is in power and at risk of losing its control of Congress in midterm elections.

And this gets to the likely real reason why Republicans in the Senate are opposing a meager amount of deficit spending to help the unemployed -- they really don't want to see the economy improve.

While I'm sure such a comment will fill my in-box with howls of complaint, it is actually shrewd politics. Americans are angry at the current state of the economy, and they are likely to blame the incumbent party, not the Republicans.

One can look back to the stimulus package of 2009, the health care bill and this rather small bit of economic assistance to see repeated examples of Republican opposition to any government policy that would help those in economic need. Serious GOP alternatives have been few and far between.

Certainly one can't dismiss the role of conservative ideology, but to ignore the political implications of obstruction is to ignore reality. It's perhaps something voters will want to keep in mind come November.

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[mendeleev 68]

This is a pretty cynical analysis -- the GOP wants to hurt the economy because their calculus is that a bad and especially a worsening economy will help them at the polls in November.

The sad fact is that they are probably correct -- and the American public is gullible enough not to see the crime for what it is.

I've already been working the streets to get the vote out in November. Have you?

[웃 910]

Send the U/E on a 1-way ticket to Haiti and air drop them bologna sandwiches twice a week.

[DukeOfYork 28]

It's a bit hard to stomach this sort of anti-deficit mantra, particularly when it comes from Republicans who had no such qualms when it came to cutting taxes in 2001, repeatedly voting for Iraq war supplementals or passing a $700 billion package to add prescription drug benefits to Medicare -- with zero offsetting spending cuts

So wrong + wrong = right?

Edited July 2, 2010 by DukeOfYork

[alienlovechild 75]

This is a pretty cynical analysis -- the GOP wants to hurt the economy because their calculus is that a bad and especially a worsening economy will help them at the polls in November.

The sad fact is that they are probably correct -- and the American public is gullible enough not to see the crime for what it is.

The GOP wanted to extend benefits using stimulus money that wasn't already spent. The OP article was pretty crappy to miss that and then drone on about other topics.

"Republicans argue that the bill would add $33 billion to the deficit and want the money to come out of unspent stimulus funds, while Democrats argue that the unemployment assistance should qualify as emergency spending. Approximately 1.7 million people will have lost their unemployment benefits by the end of this week without the extension."

http://www.webcpa.com/news/Senate-Again-Fails-Pass-Unemployment-Extension-54842-1.html

[DukeOfYork 28]

The GOP wanted to extend benefits using stimulus money that wasn't already spent. The OP article was pretty crappy to miss that and then drone on about other topics.

It doesn't make much sense for the Dems to argue that passing the new bill will stimulate the economy when there are unspent funds from last year's pork-ridden stimulus package sitting around. It really just makes it look like they keep wanting to put us even further in the red.

I fail to see the logic in not using unspent stimulus funds in favor of allocating "emergency funds".

Edited July 2, 2010 by DukeOfYork

[Sofiyya 1,687]

Hey, Steve. Do you realize that your avatar is of a man who hated illegals? Cesar Chavez had a minute man group to stop them at the border, and routinely reported suspected illegals to Le Migra. Does using his face as your avatar mean you're also anti-illegal now? Or does it mean you've bought into the Leftist mythology about him?

[Obama 2012 1,714]

So the author is hilarious and understands NOTHING about real economics and growth.

First off - The government cannot create growth and cannot stump growth with PUBLIC sector jobs. Which is what is being described as lost/created in this article.

Losing of 200,000 public sector jobs is actually a GOOD thing. That's millions to billions of dollars saved on salaries, health care, pensions, etc. which overall helps the bottom line for the government.

What needs to happen, is congress needs to go in, extend certain tax cuts that expire at the end of the year. Ones that will directly effect small businesses for one. Congress also needs to go into "too bad, so sad" mode for those who have been unemployed for 99 weeks or more. Tell them to get up off their butts, go to Wal-Mart and get a damn job. Move into a smaller apartment. Move somewhere they can afford and LIVE WITHIN THEIR CURRENT MEANS.

Sometimes basic common sense has to sink in here. I know we're talking about Washington. I know we're talking politics, but at the end of the day, we cannot afford to spend a few billion here and a few billion there. We can't afford to keep holding people up as it does nothing to fix the overall problems facing us today.

The PRIVATE sector is what creates growth, makes the government money, allows government employees to even exist, etc.

You can't do a damn thing promoting spending on public grants, public employees, etc. It's a horrible idea and the government actually loses more money than they make. It's a continued spiral of negative growth, especially if you raise taxes and try and take more money from the hurting private sector in the process.

Ugh. ####### opinion article like that in the OP really irk me in their ignorance. It's all 'touchy feely" and has no intellect behind it whatsoever.

[Ban Hammer 13,366]

Hey, Steve. Do you realize that your avatar is of a man who hated illegals? Cesar Chavez had a minute man group to stop them at the border, and routinely reported suspected illegals to Le Migra. Does using his face as your avatar mean you're also anti-illegal now? Or does it mean you've bought into the Leftist mythology about him?

[mendeleev 68]

The GOP wanted to extend benefits using stimulus money that wasn't already spent. The OP article was pretty crappy to miss that and then drone on about other topics.

"Republicans argue that the bill would add $33 billion to the deficit and want the money to come out of unspent stimulus funds, while Democrats argue that the unemployment assistance should qualify as emergency spending. Approximately 1.7 million people will have lost their unemployment benefits by the end of this week without the extension."

http://www.webcpa.com/news/Senate-Again-Fails-Pass-Unemployment-Extension-54842-1.html

A lame excuse, masked as attempt to take money out of the economy rather than put more in as is needed during the emergency, only provides evidence to support the accusation that the GOP cynically wants the economy to deteriorate in order to improve their electoral prospects.

[Obama 2012 1,714]

A lame excuse, masked as attempt to take money out of the economy rather than put more in as is needed during the emergency, only provides evidence to support the accusation that the GOP cynically wants the economy to deteriorate in order to improve their electoral prospects.

STOP. A government cannot put money into an economy. A government can only keep money in an economy by lowering taxes. If you raise taxes, if you 'create jobs' with government funds you are still taking money out of the economy. Government spending and government jobs are a negative on the economy. Simple math and following the money trail tells you this.

[mendeleev 68]

STOP. A government cannot put money into an economy. A government can only keep money in an economy by lowering taxes. If you raise taxes, if you 'create jobs' with government funds you are still taking money out of the economy. Government spending and government jobs are a negative on the economy. Simple math and following the money trail tells you this.

Looks like you weren't paying attention to the massive successful, massive intervention the Chinese made to rescue their economy from the US financial crisis.

Rather than making commands IN ALL CAPS that suggests one might be losing one's temper due to on target criticism, I suggest that you get a subscription to Financial Times (or The Economist, although FT covers more news more rapidly), read it for a year or so, make up for what you clearly never learned in school, and only start resuming making comments on the economy when you are more educated on current events.

[Obama 2012 1,714]

Looks like you weren't paying attention to the massive successful, massive intervention the Chinese made to rescue their economy from the US financial crisis.

Rather than making commands IN ALL CAPS that suggests one might be losing one's temper due to on target criticism, I suggest that you get a subscription to Financial Times (or The Economist, although FT covers more news more rapidly), read it for a year or so, make up for what you clearly never learned in school, and only start resuming making comments on the economy when you are more educated on current events.

Don't try and challenge me here. You will lose horribly.

US vs. China. You really want to take a look at this?

China is in a unique position from the United States.

#1 Labor is dirt cheap there. Laborers there are lucky to make $4-5k a year in the best areas. Average laborer in the US makes between $30-$40k.

#2 China is leading the world in manufacturing. They actually produce.. The United States has gone away from production and is very consumer based (which any legitimate economist will tell you is a disaster waiting to happen). See all of those US jobs that have gone away? Look at where a good chunk of them went. Unless the US can find a way to bring manufacturing jobs back here and we actually start producing things in this world again that are useful, then we're in for a much larger world of hurt.

#3 China's government is not in debt. They actually have a budget surplus that they have built up over the years. Reserves that are in the trillions. They actually have the ability to send LOANS out into their economy to be repaid back later. They aren't digging themselves into any type of further debt by putting money into the economy. When they are putting money into the economy, they are literally putting it in. Not pulling it out of thin air like the United State does every time we borrow (with interest) from the Federal Reserve and increase our debt by trillions.

#4 If that's not enough, China's economy has always been tightly controlled and as such has kept people living a pretty bad standard of living. Just in the past decade has China started embracing a market economy and THAT has worked wonders for them to help their overall growth. Though it has been a problem for them in trying to keep people out of the cities and China has had to work hard to try and figure out ways to keep people in the outer-lying areas as to prevent some of the already abundant overcrowding. Economic growth for them has also seen its negatives thanks to this.

Need we even go on? We're trying to compare apples to oranges here in so many ways it's not even funny. Don't tell me what I need to read and not read. I keep well informed.

[alienlovechild 75]

A lame excuse, masked as attempt to take money out of the economy rather than put more in as is needed during the emergency, only provides evidence to support the accusation that the GOP cynically wants the economy to deteriorate in order to improve their electoral prospects.

So the GOP is somehow intentionally killing the economy without winning any major legislative battles for the last year and half.

So you really think people should be entitled up to 99 weeks of unemployment benefits? If you want to use the political angle over economic necessity sounds like the Democrats are bribing the unemployed so they don't take it out on them at the polls.

[spookyturtle 9,466]

I read the title to this thread quickly and thought it said The GOP and the Politics of Economic Palin.