Make no mistake, if the Republicans force the unprecedented need for drastic spending cuts because they wont raise the debt ceiling, they will pay for it at the polls. The talk is that since the economy apparently stalled with the bad jobs report today, that the Republicans should just stand firm because they don't need to give anything to Obama because he's the one who's going to get blamed anyway. Although the public does not seem to be happy with Obama trying to fix the recession, polls clearly show that the public clearly remembers the economy tanked and the recession dug in under the Republicans and President Bush. From the time of Reagan through today spending and stimulus has been the biggest motivator of economic recovery. While Reagan also had tax cuts, and during the recovery saw tax revenue rise, he also saw deficits climb eightfold. The reason was all the spending the government had to do to stimulate the economy out of that recession. It is not a surprise that this recession has been more stubborn because it is the worst recession since the Great Depression. Every objective economic body has stated that the stimulus stopped this recession from having much greater unemployment levels that could have possibly spiraled down into a depression. It took all of this just to move us a bit forward. Now we need to do more not less. In the recovery revenues would rise and the need for some of the government spending would shrink and we would see deficits quickly shrink like they did during Clinton in the 90s. That's because his tax cuts were much more targeted towards encouraging investment and business expansion. The Republicans got that tax cuts under Bush and kept them under Obama and it did not stimulate the economy under Bush, it did not stop us from spiraling into deep recession under Bush and it has not added much to the recovery for Obama. If tax cuts are the answer would've worked for Bush. If worrying about overspending was the issue for the Republicans they should've said something when Bush was creating all these gigantic deficits. To complain about deficits now when we need to be spending to get ourselves out of the worst recession since the depression clearly shows how the Republicans are out of touch with mainstream America, the needs of the middle class and the actual workings of the economy. If they slash spending now and stop stimulating the economy what do they think they will be preserving if we go into a double dip recession and head towards depression? Just as lax conservative policies have allowed earnings and jobs to go offshore reducing the ranks of the middle class, a devastating double dip recession now would diminish those ranks much further. If the middle class goes, so goes the wealthy. Who does the daily work, who spends the money and buys the products and services? The middle class. We need a compromise now from the government that continues to stimulate the economy while making real inroads into reining in spending. Corporate earnings have been good, productivity is good and the rich are doing very well. Corporations and the wealthiest are sitting on these are earnings and seem to be riding out the rocky economy instead of trying to do their part to invigorate it. This is a mistake because if the economy falters, business will find itself back in the mess they were experiencing two years ago. The American people are not stupid. They don't have blinders on. They may get frustrated easily and polls may show they are not happy that Obama hasn't been able to do more for the economy, but those same polls show they still know where the roots of all this trouble began. The Republicans are trying to push the same failed policies that created this mess. If we don't have cooperation and a government that is working together to move the people and the economy ahead, the Republicans should not for a minute think that Obama will bear all the blame! The end is near...but will it be the end of the weak economy as we move forward, or the end of the weak recovery as we fall back into recession?
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8 comments:
I've never been very hip on understanding the economy...or what it needs from government.
I can respect that. I am drafting another "conversation" that puts the deficit, stimulus and GDP into perspective. Unfortunately with the time delay while Yahoo decides if they will publish something, some of the article might be passe by the time it may be published!
I ran across this article by Barry Rubin, who almost always limits his wrting to the MidEast. I don't know enough about ecomomic issues to say for sure, but his thesis was appealing.
See:
http://pajamasmedia.com/barryrubin/2011/07/11/why-liberals-and-democrats-should-oppose-obamas-policies/?singlepage=true
I can understand why you might find it appealing, but it is also ridiculous and could only have been written by a conservative looking to pander to his constituents and not really have a discussion with democrats. He brings up too many points to discuss here but I have touched on many of them, including in this post, and will be touching on more of them in my upcoming Yahoo pieces. Suffice it to say that regardless of all the right wing "horror" at current spending and tax ideas, the Republicans created this mess, offered nothing different to fix it because these are standard fixes utilized for decades, and in fact the stimulus and bailout began under Bush. Under Regan we spent a lot and cut taxes and got a great Recovery and huge deficits. Under Clinton, we had slightly higher taxes (mostly from H.W. Bush) and targeted tax cuts from Clinton around capital gains and R&D, saying to the rich 'if you don't want to pay higher taxes---invest in the economy)Under this more moderate and even handed approach we not only had a great Recovery but also had budget surpluses! What Obama has done wrong, primarily, besides his wrong headed MidEast policy, is to give in too easily to Republican demands thereby watering down the gains he makes. He should not have forgone the public option to healthcare reform because that would have brought real competition to the field. He should not be looking to reach an agreement with Republicans that will cut government funds now when the economy calls for more investment. Are huge deficits good? No, but you don't cut when the economy is still shaky, fix it like Clinton did and get your surpluses! Also, let us put it in perspective---our economy has grown a lot since the Regan era deficits. While a$1.4 trillion dollar deficit is not good, let us remember that the top 1% of our country, in 2008, had Adjusted Gross Income of $1.6 trillion. If our economy was thriving and our people working we can handle this spending and start paying off debt like we recently did back when Clinton was President.
I must confess that my eyes glaze over when I read about economic issues, especially on a national and international level. I can barely understand my own mortgage!
I liked Rubin's nod to Clinton and the Dem center. But the details, sadly, i cannot follow. I do indeed recall that President Bush was the first stimulus/bailout guy. As for the rest, I'm willing to take your word for it, as I have absolutely no idea what would create jobs.
B :}
I ran across another article you'll dislike, but it comes from someone who it is often said represents "the intelligent conservatives" Charles Krauthammer.
Again, I have no head for this stuff, but since I've developed a distaste for President Obama, political attacks on him have become more interesting. What do you think of this:
http://www.washingtonpost.com/opinions/the-elmendorf-rule/2011/07/07/gIQAPagk2H_story.html
Again, this is all pretty talk from people who do not worry about the middle class and the poor. Obama is attacked for not doing more about the deficit and reproached for not jumping on the congressional budget that cuts spending. Now is not the time to cut spending and no Republican President has ever cut spending during a weak economy either. He wrote about the unprecedented deficits but Regan had his own and 200 billion in the 80's with the GDP of the 80's is not that different from today's numbers. The d=sad fact is America is hurting right now and those who worry about the deficit and taxing the rich more than anything else are merely arguing for the failed strategies of the Bush administration, and would doom us to a double dip recession and worse unemployment. All the proposed cuts would take the money from healthcare that will cost good middle class healthcare jobs. The cuts to the elderly will take that money out of the economy because they are predominantly middle class and the middle class and poor spend their money, when the rich have more money they can afford to save it. There is no reason to think Obama loves deficits or debt. There is much more reason to think he cares more about the indigent and the middle class than do the Republicans who have advanced no new or helpful ideas during this crisis and ha e only sung the self serving mantra of no new taxes on the wealthy.
Thankx for reading it, and for your thoughts.
B :}
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