Monday, July 6, 2009

Fiscal Stimulus and Fast Acting Excedrin

While the latest nonsense from Eric Cantor gives me a headache, it is typical of what our Republican “leaders” have been saying:

Americans now agree that the stimulus package signed into law earlier this year has not achieved its intended effects, House Minority Whip Eric Cantor (R-Va.) claimed Monday.Pushing back against a possible second stimulus bill, Cantor asserted that the Obama administration-backed first $787 billion stimulus has not worked, and insisted that characterization has now become consensus.

The fact is that Federal purchases have yet to show any significant increase while state and local purchases have declined. Suppose I just took two Excedrin for my headache and haven’t even swallowed the water designed to chase them down and I noticed my headache is getting worse. Should I immediately conclude that the Excedrin will not work and it’s time to take some voodoo medicine? Our course not – but Cantor just might:

House Minority Whip Eric Cantor (R-Va.) said that Republicans would work with President Obama on a second stimulus bill, as long as it's like the tax cut-heavy package the GOP proposed earlier.

I thought we tried that in 2008 – and it hasn’t provided much stimulus even to date.


TheTrucker said...

why do you see the 2008 stimulus as a "tax cut"? It did not alter the tax code and it was phased out for high income earners. While the Republiars are usually full of it, that sort of a "tax cut" would be a very fast acting pain pill even for those who have recently been laid off. Or maybe I misunderstand the 2008 stimulus. I understand the logic of spending as opposed to tax cuts. I understand that the people may or may not spend and that the government will be spending for them and providing jobs and cutting unemployment outlays all at the same time. But the states are clogging up the pipe.

Everyone agrees at this point that the state governments need some help very quickly but that does not seem to be happening either. It appears that all these supposed "shovel ready" projects will be delayed while the states furlough the people that will be needed to let the contracts.

This was not supposed to work out this way and no matter what the reality might be you can expect the Republicans to continue to do all they can to discredit the current administration and the current congress. The Congress had better figure out some way to bring next year's money forward and they'd batter do it fast. It certainly seems that state government cutbacks will make this thing a lot worse. And next year can be dealt with next year.

And BTW... No money for California. Those morons need to fix their make believe government. All those electoral votes shifting to red because of Democratic stupidity.

Brenda Rosser said...

Highlights of the 2008 fiscal 'stimulus':

2009 – February 7th. GM using bailout money to invest in Brazil

2009 – February 5th. Regarding the $700 billion stimulus of October 2008: Follow the Money. It wasn’t a credit freeze. Paulson and Bernanke were either wrong or they were lying. “Normally, when you’re going to spend a lot of money, you present the data and the economic theory to support it, yet here’s the biggest non-military government intervention in history since the Great Depression, and there was no evidence presented to support it, and no detailed economic argument made about what market failures this $700 billion was going to fix.”…. : “There was no credit crisis. What was happening was much more arcane: A few big institutions that had made bad bets were at risk of going bust, and that’s it. And if they had gone bankrupt, it wouldn’t have been the end of the world. In fact, there is huge excess capacity in financial services and there’s a need to focus on the healthy ones and let others fail. Meanwhile, business lending and consumer lending were still strong in September and October, and it’s still okay.”

2009 – January 9th. Bailout Czar's Secret? Copy. Paste. Repeat. Rather than write original answers to questions posed in December by a congressional oversight panel, U.S. Treasury officials appear to have creatively repurposed old testimony and even Web site copy into a 13-page report that left some questions entirely unanswered.

2009 – January 9th. Where Did Taxpayer Money Go? Panel Slams Treasury. “A scathing new report...


TheTrucker said...

I would hope that all persons (not just the economists) would understand that the Wall Street bailout and the stimulus are two different animals. But unfortunately, this is not the case. The government hating Republiars seek to blend all into one "scathing" whatever.

Brenda's criticism does not even hold up when looking at the bailouts of GM and Chrysler. Those were actually looked at by the Congress and actually did have a rationale.

The Wall Street bailout was a replay of the Iraq invasion. The administration held all the cards and claimed the sky would fall if the Congress did not capitulate. The reality, I think, is that after the Fed bailed out AIG prior to the Wall Street bailout, the Fed and the American government had one fist in the tar baby. The taxpayers were not yet stuck, but the Fed and the administration certainly were. And this is the point at which the administration chose to lie to the Congress and to the American people AGAIN.