Friday, February 06, 2009

misunderstanding the stimulus all the way to the brink

Lots of people don't understand what an economic stimulus package is all about. Unfortunately, many of those people are in Congress. Some moderate Republicans and conservative Democrats are trying to hack $100 billion off of the stimulus package, in the mistaken belief that debts are a big concern at the moment.

Hello - the economy shows serious signs of stalling. You want a REALLY big budgetary blowout? Slash the amount of corporate and income taxes collected when corporate profits dive even further and unemployment soars even higher than it would absent a stimulus package.

And they claim to be removing things that aren't going to stimulate the economy. Retiring Senator Mel Martinez from Florida and his fellow Republicans say that paying for school construction does't qualify.

How to explain this? Simple. They are stupid. You see (I will use small words here), when you build a school, you pay men and women a salary to build it, and you pay companies money to use their equipment and to buy their concrete and to design the school. All of that is a direct boost to the economy. And at the end of it, you have employed some people AND you get a nifty school that children can use for the next 30 years! Neato.

Or if not stupid, they are simply opposed to doing anything for regular people. I bet if this was funding to build heliports for corporate bigwigs in Manhattan and Los Angeles, they would be OK with it.

Along these lines, Steve Pearlstein has a $53.5 million proposal to improve economic literacy of Congress by hiring PhD economists to help them puzzle thru things. His idea is facetious, but he identifies a real problem. Actually, I suspect the economic literacy of many of them is better than they let on, but they will put partisan politics and their re-election prospects ahead of the country.

And so now, as Paul Krugman said, The American economy is on the edge of catastrophe, and much of the Republican Party is trying to push it over that edge. That is another Republican scandal. But it is also a Democratic scandal in that their Congressional leadership is weak enough to let them do this.

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