Saturday, January 24, 2009

Republicans stand in the way of economic recovery

Harley Davidson's layoffs are another indicator that the economy is in a freefall.

That is why most economists support the Obama administration's push for a large stimulus package. Private demand (consumption and private investment) is non-existent. The only way to reverse the economy's decline is through increased public demand.

President Obama has proposed an $825 billion stimulus package. Many economists think that Obama's proposal is too modest and that a stimulus in the range of $1.3 trillion is needed.

But not the Republican Party!

The very same Republican leaders who remained silent as President Bush ran record deficits nearly doubling the national debt are now expressing concern over Obama's plan.

These are the very same politicians who refused to extend unemployment benefits, increase food stamp expenditures and expand health care for children from low-income families a little more than a year ago. The only economic recovery measures they support are tax cuts, one of the least effective forms of stimulus.

The right's failure to recognize the severity of the crisis and to endorse an effective federal responses has contributed to the loss of 2.4 million jobs in the last year, more than a million in the last two months.

Once again they are digging in their heels and opposing federal action. President Obama has exhibited restraint in responding to this ideologically motivated opposition. But people are hurting and the Republican Party is standing in the way of help.

Nobel Prize winning economist Paul Krugman summarized the Republicans opposition in his New York Times Column, "Bad Faith Economics" today: "Basically conservatives are throwing up any objection they can think of against the Obama plan hoping something will stick."

President Obama politely listened to Republican gripes about his stimulus package during a meeting with congressional leaders last Friday - but he also left no doubt about who's in charge of these negotiations. "I won," Obama noted matter-of-factly, according to sources familiar with the conversation.

In an earlier interview President Obama was clear about his negotiating style. Right-wing ideologues who have led their party toward irrelevancy and the country to the brink of economic disaster ought to remember what the President had to say.

12 comments:

jj999 said...

I hope that Obama, his economic team, and Congress can work together to get a sensible stimulus package passed quickly.

I recently saw articles on a few newspaper websites talking about how Obama was working with the U.S. Chamber of Commerce to make sure that the stimulus package was smart and effective at fixing the economic problems, now and into the future. I take that as a very positive sign, since Democrats haven't always worked closely with the business community.

The main points of their discussions have been making sure that the stimulus package includes tax relief, infrastructure funding, housing industry tax credits to assist homeowners, and reducing borrower & lending fees through the Small Business Administration. Of course, there are other items that need to be in the stimulus package, but I agree with all four of those ideas.

I noticed that the U.S. Chamber of Commerce is asking for input from the public to let them know which of those proposals they support the most. The Chamber can then use that data in their discussions with Obama and members of Congress. Make sure to vote in their poll here - http://www.friendsoftheuschamber.com/email/email4.cfm?id=196

Anonymous said...

Mr. Rosen:

The last I checked the Democrats have large majorities in the house and senate, just pass the stimulus package already. Mr. Obama, just wants political coverage, to include Republicans. Maybe you spend more time, Mr. Rosen not quoting the 99.9% wrong Paul Krugman and work at your MATC job. It must be nice to have a cushy government/teching job.

Anonymous said...

Unless Obama and the Dems give massive tax cuts - permanent ones - to the private sector (business and wage earners) the economy will continue to slide. Businesses, not government, are the true job makers, so making things better for them is the way to correct the downturn. Thank goodness for the Republicans, who understand economics.
SJ
http://libertyslogic.blogspot.com/

Anonymous said...

Explain to me how any spending in the proposed stimulus package will create a single job at Harley Davidson.

Anonymous said...

haven't we already fallen victim to massive tax cuts to the private sector? where has that lead us...into the worst economic crises in decades. haven't we learned anything?

Jeff Werstein said...

"Conservative" and "learning" are contradiction in terms. Learning involves being progressive and being willing to change. I am not surprised that our conserative countrymen will resort to ad hominem attacks to fight against real change and recovery.

Dale Smith said...

Jeff:

If you want to talk about "ad hominem attacks", just read and listed to all the so-called "progressive" (the new liberal) blogs and talk-shows for the past eight years against GWB and other republicans.

Mr. Obama has a large majority in the House and the Senate, he does not need republican support to pass this. I am sure that a few liberal republicans in the senate will fall for this and vote for it, so he probably has a fillabuster proof margin in the Senate. So what is the problem? The problem is that Mr. Obama wants political coverage when this boondogle of a spending plan fails. He wants to say that this had bi-partiasan support.

This stimulus plan will not work and even the OMB stated that the spending will not really hit the economy until 2011 or 2012. None of this is progressive, it is the same old liberal agenda.

As a conservative, I am for less government spending and having ALL Americans pay less in taxes, not have 25% of Americans pay 85% of the taxes. Obama's tax cut for individuals is a joke. A refundable tax credit for people who pay no income taxes? Have you even read the stimulus plan proposals? or are you just saying the Mr. Obama's talking points? It sounds like the latter.

Mr. Rosen have you even read the proposed bills?

I do not want conservatives to vote for this thing , because it will not work and not create new jobs, or I forgot, that is not the standard anymore, it is preserving jobs. President Bush was not held to that standard.

I forgot the left is held to lower standard, just ask Timothy Geitner and Hillary Clinton, Carol Browner, etc.. If these were Republican appointments, you could forget about it.

Anonymous said...

Another false argument I've heard made by some Republicans is we can either a)have more government spending and higher deficits or b)have tax cuts (with the implication that tax cuts would not lead to higher deficits). In fact, both higher government spending and tax cuts need to create higher deficits or they won't work to stimulate the economy. That is simply standard economic theory understood by both conservative and liberal economists. If we reduce taxes and then reduce government spending to match the tax reductions, the total demand will not go up.(in fact it will go down if the balanced budget multiplier is at work). Then the recession would become worse. Comment by Jim Carpenter (jcmilwgr@yahoo.com)

Dale Smith said...

Mr. Carpenter:

I guess we will see if the largest increase in government spending will work, since this will probably be done. Why do you care what Republican's think, since the Dems do not need the votes.

I also love they way you say. "false arguements". Tax cuts do work if they are done correctly. JFK knew it. Ronald Reagan knew it. Obama's spening plan will not work, take the time to review the Congressional Budget Office which analyzed the plan. They are NON-Partisian. But I guess Mr. Carpenter you know better than us dumb conservatives. I have a masters degree in economics and a CPA, so I think I know what I am talking about here.

The problem with GWB is that he was not a conservative and spent too much money, he or the republican controlled congress did not practice fiscal responsibility.

Anonymous said...

Mr Smith,

Does your degree in economics somehow make you more qualified b/c you are conservative than us liberals with a degree in economics? We have already seen that the conservative policies of the Republicans to stimulate the economy by using tax cuts and tax rebates has failed to work. why would it be any different this time? given a tax break, how many people will pay off debt vs. spending that money where it could stimulate the economy? I think we both know, the priority of most americans would be to pay off debt or save it. it is easy to name call and attack, but until you or your party can offer a real viable solution to the current economic crisis, your comments can be dismissed like anyone elses. don't take some high ground just b/c you have a degree. congrats to you...but a lot of us are smart, educated individuals with something to bring to the table rather than just simple party line rhetoric!

Anonymous said...

Mr Smith: I never said tax cuts will not work to stimulate the economy. I said tax cuts that are not coupled with increased deficits will not work. In other words, when taxes are cut, government spending cannot be cut to match the tax cuts because this would not lead to an increase in aggregate demand, which is the whole point of the stimulus. In the short run, deficits must increase. And what is misleading is the notion that somehow we can stimulate the economy without increasing the deficits by a large amount in the short run. Obama's plan has billions of dollars of tax cuts as well as billions of dollars of spending increases. Both are stimulative. Submitted by Jim Carpenter.

kourtney said...

I recently saw articles on a few newspaper websites talking about how Obama was working with the U.S. Chamber of Commerce to make sure that the stimulus package was smart and effective at fixing the economic problems, now and into the future. I take that as a very positive sign, since Democrats haven't always worked closely with the business community.