Wednesday, November 03, 2010

Good luck with that

The Republicans who have taken over congress in Washington are proclaiming two mutually exclusive goals: Cut government spending, and decrease unemployment.  But the problem with the economy is not that small business and the wealthy don't have enough money. The real problem is slack demand resulting now from job losses and the housing mess. The Republicans have additionally taken over 17 state legislatures, including Minnesota, meaning decreased spending and public sector employment across the country. There is no way the Republicans can alleviate unemployment or the pain of the housing meltdown by reducing government spending. In a nutshell, the Republicans will be bringing on the pain. The only question is whether the Republican Doomsday Machine can somehow spin the mess in 2012 to blame Democrats.


Tom said...

Well, the present administration continues to blame Bush after two years so I'd guess that the Repubs will claim at least the same amount of time.  Besides, the Repubs only have the House so nothing will get done for the next two years as long as the Senate and the President hold the line.

Phoenix said...

Oh, the Republicans already have been pretending that Bush didn't start the banker bailouts and that everything was fine until Obama was sworn in.  Of course they'll pretend their actions aren't hurting anything.

Obama's main problem was that he didn't use reconciliation to push through a stimulus big enough to get unemployment down fast, the way Bush used reconciliation to push through his big-ticket items.  If he had, and had done that instead of pushing an industry-friendly HCR bill in exchange for election support that never came (the health care industry broke their end of the deal just when the Dems needed them the most: then the Dems would have gained seats.

Joe Sixpack said...

If you assume that the only way to create jobs is for the government to spend money, then you're right, Rob. But many people know that the government doesn't create jobs at all -- they take taxpayer money that would be used for other things and spend it to generate a job.

You can reduce government regulations (which reduces government spending) and free the private sector up to hire more workers. Bingo: less spending and more jobs.

Alec Timmerman said...

You can re-build every road, bridge, highway, and school in the state, and bingo, more jobs. What's gonna stimulate the economy more, $45,000 for a construction worker to have a job who previously didn't have one, or $300 a person in some silly tax cut?

Tax cuts for the wealthy are the most ineffciient stimulus possible. They don't create jobs. They go into savings or stock buy backs. It's a great theory that has been disproven over, and over, and over.

Nevada is #1 in unemployment and doesn't tax income or corporations.

Rob Levine said...

I don't assume "<span>the only way to create jobs is for the government to spend money." That's one way to create jobs.  And when the private sector isn't hiring, it's basically the only large scale way to create jobs, thus stimulating demand. It works. It's called Keynesianism. And sorry, Joe, but a government created job is still a job.</span>

<span>No matter what my other thoughts are about regulation, merely doing away with them does not necessarily create more jobs or spending; it merely gives a higher profit to the owners.

Joe Sixpack said...

I don't see the words "tax cuts" anywhere in what I posted, Alec, so I'm not sure why you're bringing it up as a response to what I wrote.

But since you brought it up, and you like looking at one data point as an example of a valid economic theory, I'll give you two data points: (to the best of my recollection) California and New York have the highest income and sales taxes, and also have the highest deficits.

James K said...

And George Bush and company did exactly that, Joe, and what happened?  They had the lowest job creation rate of any sitting President in the history of the United States.

The government isn't to blame for the private sector not hiring.  The private sector is to blame for the private sector not hiring.  Specifically the rich fat cats who are using the current economic meltdown, thanks to the Republicans, as an opportunity to drive down wages and force more people out of work so the aforementioned rich fat cats can make more money. 

James K said...

Nah, we Democrats get to blame the Bush administration for the next eight years.  After all..that's about how long the Republicans blamed Clinton. 

Fair is fair right?

Tom said...

<span>"You can re-build every road, bridge, highway, and school in the state, and bingo, more jobs."  And the money for this comes from where?</span>
<span>If we just put everyone to work for the government at $45,000 we'll have full employment.  The government will get $4500 from each worker in taxes.  This can go on for just how long?  (Forever, as long as the printing press doesn't run out of ink)</span>
<span>If the wealthy just put their tax cuts into savings, why was the national savings rate actually negative earlier this year (or was it last year?)</span>

Tom said...

And they blamed President Clinton for???  (Outside of cheating on the First Lady)