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Snake Oil - the Republican Economic Stimulus Plan
Author: BobR    Date: 01/28/2009 12:09:59

The battle has been heating up over what the economic stimulus plan should be. Although there are differences between Obama's vision and that of Congress in general, the real battle lines are drawn along party affiliation. As in most things economic, the Republicans are wrong yet again.

The Democrats want to create jobs and work projects to get the economy moving again, ala the Roosevelt model during the Great Depression. The Republicans want to use tax rebates, tax cuts, and tax credits to put more money into people's hands. What's wrong with the Republican plan? Let us count the ways...

On the surface their plan seems to make sense - if people have more money, they'll spend it and kick start the economy, right? Wrong. This falls under the same umbrella as Supply-side Economics - if you let the rich keep more money, they'll create more jobs. We've seen just how badly that one works.

It's far more likely that if you let people keep more of their money they'll either pay off debt or save it for a rainy day. Not that that's a bad thing, but it won't do what it's supposed to do here - stimulate the economy.

On the other hand, if you create jobs, then people who were collecting unemployment or welfare will now be doing actual work, AND they'll be spending the money on stuff, like food, gas, clothes, electronics, etc. It's these purchases that drive the economy and create more jobs.

With both the Republican and the Democratic models, the treasury ends up with less money. But with the Democratic plan, the economy actually gets stimulated AND you actually get some tangible work done for the money.

Another problem with the Republican plan is that it only helps people who already have jobs - it doesn't actually create new jobs. They say it does, via the previously debunked supply-side method, but the Democratic plan directly creates jobs. Reversing the current trend of job loss is going to be a key factor towards helping the economy.

Georgia Republicans (never known to be a very bright bunch) are trying to taint the Obama plan by calling it "socialism". Despite the reality that it will bring much needed dollars to Georgia, they are still dismissing it:
President Obama’s $825 billion economic stimulus plan targets the right problems with the wrong solutions and likely would damage the economy rather than save it, several Georgia Republican congressmen argued Saturday.

The American Recovery and Reinvestment Plan could ease Georgia’s budget problems in the short run, the legislators conceded, but they asserted that the costs are too high.

“Everybody likes to get gifts,” said U.S. Rep. John Linder, a Republican from Duluth. “Somebody has to pay for them.”
[...]
“We’re going to take money from Georgians, wash it through Washington, take off some of the money Georgians sent to Washington and then allow Georgians to have some of that money back,” said Rep. Tom Price, a Roswell Republican who is pushing for more tax cuts and credits. “It absolutely makes no sense.”
[...]
"I don’t think anybody wants to hear you’re voting against it or that the money’s not going to be coming,” said Rep. Lynn Westmoreland, a Republican from Grantville. If the bill dealt only with roads, infrastructure and job creation, he said, he would vote for it —- but not as it’s written now.

Rep. Jack Kingston, a South Georgia Republican who sits on the House Appropriations Committee, faulted the package for spending too much on “left-leaning” social programs.

He took particular aim at money earmarked for arts and health programs, including a national wellness program he characterized as creating something akin to a “national fat farm.”

God forbid someone should actually get something out of the billions of future tax dollars being sacrificed to get the economy moving after 8 years of Republican mismanagement. So screw the economy if it means money for "left-leaning" programs like art. Jaysus Christus, these people don't just want to drown government in the bathtub, they want to drown the whole country. There's nothing Republicans hate more than someone getting something that they didn't work for. They think people should emulate CEOs who earn their million dollar golden parachutes the old-fashioned way - by running their companies into the ground. On a side note, I wonder how much GA gets back in Federal dollars -vs- what it contributes via income taxes - before this stimulus?

Is this another case of "destroying the village to save it"? It certainly seems like policy is trumping reality in the Republican economic plan. It's the same old snake oil with different packaging.


 

122 comments (Latest Comment: 01/29/2009 06:40:47 by livingonli)
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