Wednesday, March 4, 2009

Herbert Hoover Democrats

If we were at full employment, I might agree with what Evan Bayh wrote for the Wall Street Journal:

The Omnibus Appropriations Act of 2009 is a sprawling, $410 billion compilation of nine spending measures that lacks the slightest hint of austerity from the federal government or the recipients of its largess. The Senate should reject this bill. If we do not, President Barack Obama should veto it. The omnibus increases discretionary spending by 8% over last fiscal year's levels, dwarfing the rate of inflation across a broad swath of issues including agriculture, financial services, foreign relations, energy and water programs, and legislative branch operations. Such increases might be appropriate for a nation flush with cash or unconcerned with fiscal prudence, but America is neither.

Bayh later notes that we are in an “economic downturn” noting that this fact requires that we need “new policies”. Is Bayh saying we should excuse fiscal irresponsibility during periods of strong aggregate demand but then turn all Hoover-ish when aggregate demand is weak? As Manu Rasu reports, Bayh is not alone:

Moderate and conservative Democrats in the Senate are starting to choke over the massive spending and tax increases in President Barack Obama’s budget plans and have begun plotting to increase their influence over the agenda of a president who is turning out to be much more liberal than they are. A group of 14 Senate Democrats and one independent huddled behind closed doors on Tuesday, discussing how centrists in that chamber can assert more leverage on the major policy debates that will dominate this Congress. Afterward, some in attendance made plain that they are getting jitters over the cost and expansive reach of Obama’s $3.6 trillion budget proposal.

I can understand the desire to restrain the growth of Federal spending over the long-term, but I do not understand the call for fiscal austerity now.

1 comment:

Anonymous said...

I do not understand the call for fiscal austerity now.

as is likely with any aged sound recording, there's a scratch on it and it's skipping.