Well, the economic numbers took a slight click downward. Democrats are stressed that this means the Republicans will regain momentum as people draw all the wrong dots as to what is going on. Republicans are recharged that all their efforts to keep the economy from improving are finally paying off. And the average citizen doesn't understand why things aren't getting better right now, today, and if they aren't, why, then throw them out and start over again!
Sorry, America. Strategy matters. Base economic principles matter. The stimulus worked. Basic Keynesian economics is the only known method for pulling out of a recession or depression. In order to move forward, consumer demand must increase. But in a recession, consumers pull back their spending, Businesses are reluctant to increase production when no one wants to buy things. If consumers won't spend, and businesses don't spend, who does that leave? The government, whether you like it or not.
Most economic charts will clearly show that the stimulus had positive benefits and pulled us out of the horrible depression we were headed into. The stimulus couldn't do everything to completely restore the economy because a) we were in a hole much deeper than anybody expected and b) some 40% of the stimulus was wasted on misdirected and misguided tax cuts. Even conservative think tanks, such as Moody's, ranks the effectiveness of general tax cuts (particularly those aimed at the top brackets) as pretty low.
In the short term, you need to get as much money in the pockets of the poor and middle class as you possibly can, because they will spend it and thereby increase demand. Extending unemployment benefits, food stamps, government work projects, and aid to the states are among the most vital components for this.
In the long term, we need to improve infrastructure, increase research and development (especially in the green technology areas), revitalize American education. Like it or not, the improvements to our health care system by the Affordable Care Act will help tremendously. Efforts to ease credit and to enact financial reform are also helpful (restore Glass-Steagall!).
Austerity will not work. Just ask Europe where their economies are sliding back even more seriously than ours as their anti-growth austerity measures are starting to backfire on them. Austerity just accelerates the spiral to disaster.
Budget deficits are meaningless if you don't increase demand, which improves the numbers employed, which improves those contributing into the tax base. No reduction in spending, no tax increase, is going to close the budget deficit IF WE DON'T GET PEOPLE BACK TO WORK!!!
The so-called job creators are not going to create jobs just for the hell of it. They have to be motivated by increasing demand. And demand comes from the implementation of Keynesian economics. Like it or not.
I had a person whom I respect recently say they don't "believe" in Keynesian economics. Sorry, friends. It's not like the tooth fairy. Believing or not believing doesn't change the reality of it's effects.
But all this may be academic. We are at the mercy of numbers largely derived from the Republican's refusal to allow anything to be enacted that will help get us out of it. And we have to depend on a majority of the voting public to see through it.
God help us all.
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