TPJ: President Herbert Hoover was, is and will forever be known as the president who helped drive the country off the cliff down into the abyss of the Great Depression. His big idea? A spending freeze and that is exactly what the Neo-Hooverites (The Republicans) are saying is their enlightened answer now.Including the "rising star" of the Republicanistical party Eric Cantor, otherwise known as "Dr. No" because he says "no" to pretty much anything the Democrats present. Not only that but he and the other Neo-Hooverites have no serious ideas to counterpropose:
Per Republican House Minority Leader, John Boehner, (R-OH): "US President Barack Obama should veto a 410-billion-dollar spending bill and work to freeze government outlays for the rest of the year."
It´s interesting that this was also President Herbert Hoover's failed solution to the Great Depression in 1930. He actually did it and it failed because it took a major source of spending out of the economy which tanked it even further. The Republicans keep saying that the private small businesses should be doing the spending, but they fail to state where these organizations should get the financing needed to support that spending and to get the economy "jump-started".
They are proclaiming that government at every level can't afford to do anything right now beyond such cuts and freezes. (And where were they on excessive government spending under President Bush?) As the award winning economist, Paul Krugman said this week; "That's a good idea for individuals. But when everybody [including the government] does it at the same time, everything just comes to a stop." Unfortunately, all of these Republican responses would get you an "F" in any Econ 101 class, unless, the test question were something like, "What would be the quickest and most efficient way to turn a recession into a massive, crippling depression?"
The idea of a "spending freeze", could only come from politicians that apparently can't look beyond their own political future, having run out of any constructive ideas. It was spending that helped the US GDP get back on track after the Great Depression. In fact, it took only three years for the GDP to rise as much as it had in six years in the 1920s. Sure, there was an increase in the recession in 1938, but that was the result of FDR trying to balance the budget while the economy was still recovering. It delayed the recovery with a minor dip and another increase in unemployment.
People don´t seem to understand that it wasn´t "going to war" itself, that caused the end of the Great Depression. It was the good paying "jobs" and the government spending that turned the US economy around. (In fact, if there had been no war, and all the manufactured war materials were just taken out on a barge and dumped into the ocean, it would still have turned the economy around.)
And please note that it was also spending that was the biggest help against the 1960 recession. In the Republican world, it is always about tax cuts. It may appear logical to see tax cuts as spending, but reducing income via tax cuts creates deficits, just like spending, but with much slower results. I am still trying to find someone that can explain to me how a spending freeze and tax cuts will create jobs, restart the bank lending and help the economy get back on track in a timely fashion?
Copyright G.Ater 2009
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3 comments:
Cantor shows the influence midwestern towns like mine have. We have a guy that's been on our school and county boards for years. He has no ideas. No insight. He always votes "NO" on everything that the boards vote on. He's basically a functioning moron. But he's the biggest vote getter every election. Cantor is following in this guys footsteps.
All very well said. I think of my main employer. If the company or the owner get more tax cuts, that isn't going to create one additional job. Our company needs clients in order to have jobs. Maybe tax cuts would help the clients decide to spend more and hire us, but it all seems theoretical and unconvincing. Republicans have too much of an individualistic mindset when it comes to these things. If you cut taxes, someone else is going to get hurt. Ok, so maybe you create one job, but what about that elderly person who loses some government benefit or the child who can't afford a school lunch or the student who can't get a loan for college? Taxes are good as long as they're helping those in need.
Truth101:
Sounds like our city. They developed this new downtown area way on the other end of town. Well it boomed--as would be expected with a mall attracting other businesses.
Well the idiots in City Hall didn't foresee this (who knows why) and now we have a clogged main artery road, which is basically the only road out there.
Now it needs widening but no one here wants to pay taxes for it. I hate these conservatives who want good roads but don't want to personally have to chip in. Cheap skates who want it both ways.
Conservatism is not realistic.
Riverwolf:
Yep and an individualistic mindset won't work anymore. The world has changed and America can't sit alone anymore. Capitalism has pretty much exhausted itself as a ideology not unlike monarchy.
The ideology of the future is the hybrid of Democracy and Socialism--i.e. what most of the rest of the world has adopted successfully decades ago. We are always late to the party.
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