Republicans: Hackneyed Political Theater?

Off Topic Politics & World Issues
41

[quote]100meters wrote:
You can only be bi-partisan so much with members of a party who are nearly insane. For example almost all senate republicans voted for an amendment turning the stimulus totally into tax cuts. I think 36 of the nuts out of 40 voted for it! So how far do you reach out to bat-shit insane republicans?

tGunslinger wrote:
About 20 years ago, Japan faced a situation similar to the one we are facing right now, and they undertook a course of action that was similar to the one we are undertaking right now. They carried on with this ‘solution’ for over ten years.

About 20 years later, that period is remembered as “Japan’s Lost Decade”.

Explain to me why the outcome will be different for us than it was for them. Pretend that I’m as stupid as you think I am, and use small words and simple ideas.

You claim that doing the opposite of what didn’t work for the Japanese is “bat-shit insane”, so it must be a pretty obvious reason that following the Japs’ lead will work for us this time around.

100meters wrote:
Mostly because we aren’t following their lead. Them: spending and tax raise. US: spending and tax cuts.
See the difference?

tGunslinger wrote:
So the spending is irrelevant? If both gov’t’s spent, but one failed and one, according to you, will succeed, we can only conclude that tax cuts make the difference, and spending is irrelevant.

Yet you called the 36 Republicans who voted to amend the “stimulus” bill into 100% tax cuts “bat-shit insane”.

Care to justify your “bat-shit insane” comment? Or perhaps redirect it towards a different group of people in Congress?

[i]100meters wrote:
The spending is the opposite of irrelevant. It’s the most critical thing, the tax cuts don’t do that much, but get 2 senators to vote for the stimulus.

But yes, while stimulating you don’t want to then suck money back out with tax hikes. That doesn’t mean you need to emphasize the opposite, just emphasize the spending.[/quote][/i]

Let us add another historical example: The Great Depression. We tried governmental ‘stimulation’ then, and it failed miserably. It took WWII to get us out of that rut.

Unless you want to claim that FDR and crew lowered taxation and gov’t intervention, that’s now two strikes against ‘spending + tax hikes’.

Now, if we assume that your post above (bolded) has been officially retracted (given that it implies directly that spending is irrelevant), we may assume that you claim spending is the answer.

If we assume instead that your post above (italicized) is more representative of your stance, then we may assume that you claim ‘spending + tax cuts’ is the answer.

Then, we come to another question (and we are still assuming that I am an imbecile and cannot understand large words or leaps of logic): Why do we need the spending?

What is it, specifically, that the spending is accomplishing? What is it doing that we cannot do by ourselves?

If ‘spending + tax hikes’ does not work, why will making the small shift to ‘spending + tax cuts’ work? What is the mechanism by which spending causes the tax cuts to work?

Further, aren’t ‘spending’ and ‘tax cuts’ diametrically opposed? That is, adding them together merely reduces the effectiveness of either? That one without the other would be more effective? That combining the two is not even possible without foreign funding?

And given that we are still sitting on two strikes for ‘spending + tax hikes’, we can conclude that that end of the spectrum doesn’t solve anything? Thus leaving us with the conclusion that cutting taxes without spending would be the best solution?

Yet, you claimed that Senators who tried to do just that were ‘bat-shit insane’?

So again: why do we need the spending?

[quote] 100meters wrote:
And clearly voting for tax-cuts only is bat-shit insane, but again, your party not know for success at economics, and hopefully after the last 8 years they never have to be taken seriously again.
[/quote]

And your mama’s ugly.

42

[quote]dhickey wrote:

Please explain why tax cuts only are not sufficient.
[/quote]

Here’s the IMF’s take on that answer. (posted yet again b/c you seem to have missed it).
[i]
As for the balance between spending increases and tax cuts, we think that there are two arguments why spending increases should be part of the package, probably more so than in the past.

"Consumers who are credit constrained are likely to spend any extra money derived from a lower tax bill."

First, the decline in private sector demand is likely to be prolonged. This implies that fiscal policy can rely more than in the past on spending measures, including investment in infrastructure, because we don’t need to worry so much about implementation lags.

Second, we believe that, in the current circumstances, the marginal propensity of consumers to spend tax cuts or transfers may be low, leading to low multipliers. That said, selectivity is needed in raising spending: direct purchases of goods by the government?investment spending in particular?has a direct effect on demand and will also have positive supply-side effects. In contrast, increasing public sector wages is unlikely to help and may be difficult to reverse. [/i]

[/i]

43

1st, I don’t think you’re “batshit insane” or dumb, or whatever. I do, however, think that I disagree with you, and I’ll try to explain why.

[quote]tGunslinger wrote:

Let us add another historical example: The Great Depression. We tried governmental ‘stimulation’ then, and it failed miserably. It took WWII to get us out of that rut. [/quote]

Unfortunately a lot of history is fairly irrelevant considering the interconnected nature of the world system that we have now. The best examples might be before WWI…but even those are poor for comparison, I fear.

[quote]
If we assume instead that your post above (italicized) is more representative of your stance, then we may assume that you claim ‘spending + tax cuts’ is the answer. [/quote]

I do believe this. And the reasons I do have been highlighted in the first post on pg 2 of this thread, and copied and pasted again for dhickey… basically, I agree with the IMF.

[quote] Why do we need the spending?

What is it, specifically, that the spending is accomplishing? What is it doing that we cannot do by ourselves? [/quote]

Again, see my posts copied from the IMF website. If you disagree with the IMF, I’d like to hear why.

[quote]
If ‘spending + tax hikes’ does not work, why will making the small shift to ‘spending + tax cuts’ work? What is the mechanism by which spending causes the tax cuts to work? [/quote]

It’s not a small shift. Think of the econ 101 formula…

[quote]
Further, aren’t ‘spending’ and ‘tax cuts’ diametrically opposed? That is, adding them together merely reduces the effectiveness of either? That one without the other would be more effective? That combining the two is not even possible without foreign funding?

And given that we are still sitting on two strikes for ‘spending + tax hikes’, we can conclude that that end of the spectrum doesn’t solve anything? Thus leaving us with the conclusion that cutting taxes without spending would be the best solution? [/quote]

I’m not sure what you’re trying to say here, but basically…no. For the reasons listed above.

[quote]
Yet, you claimed that Senators who tried to do just that were ‘bat-shit insane’? [/quote]

I don’t think they are. But I do strongly disagree with them.

While I understand that they disagree with spending, I hope that they can come together to find a solution and not be obstinate simply for ideological reasons. I’ve yet to hear an honest economist who claims that govt spending would not stimulate the economy. I have heard good arguments in favor of certain types of spending rather than others…but I’ve only heard politicians arguing that spending does not equal stimulus. Even given the ideological differences, I hope that a compromise can be reached.

To refuse to compromise… this is the hackneyed political theater I’ve spoken of.

44

[i] Why I Support the Stimulus

By Arlen Specter
Monday, February 9, 2009; Page A17

I am supporting the economic stimulus package for one simple reason: The country cannot afford not to take action.

…
The legislation known as the “moderates” bill, hammered out over two days by Sens. Susan Collins, Ben Nelson, Joe Lieberman and myself, preserves the job-creating and tax relief goals of President Obama’s stimulus plan while cutting less-essential provisions – many of them worthy in themselves – that are better left to the regular appropriations process.

…
“In politics,” John Kennedy used to say, “nobody gets everything, nobody gets nothing and everybody gets something.” My colleagues and I have tried to balance the concerns of both left and right with the need to act quickly for the sake of our country. The moderates’ compromise, which faces a cloture vote today, is the only bill with a reasonable chance of passage in the Senate.

The writer is a Republican senator from Pennsylvania.
[/i]

45

[quote]dhickey wrote:

Please explain why tax cuts only are not sufficient. Please explain how Republicans economic policy was harmful?
[/quote]

Funny. But sadly, some republicans aren’t pretending to be this stupid.

46

[quote]tGunslinger wrote:
100meters wrote:
You can only be bi-partisan so much with members of a party who are nearly insane. For example almost all senate republicans voted for an amendment turning the stimulus totally into tax cuts. I think 36 of the nuts out of 40 voted for it! So how far do you reach out to bat-shit insane republicans?

tGunslinger wrote:
About 20 years ago, Japan faced a situation similar to the one we are facing right now, and they undertook a course of action that was similar to the one we are undertaking right now. They carried on with this ‘solution’ for over ten years.

About 20 years later, that period is remembered as “Japan’s Lost Decade”.

Explain to me why the outcome will be different for us than it was for them. Pretend that I’m as stupid as you think I am, and use small words and simple ideas.

You claim that doing the opposite of what didn’t work for the Japanese is “bat-shit insane”, so it must be a pretty obvious reason that following the Japs’ lead will work for us this time around.

100meters wrote:
Mostly because we aren’t following their lead. Them: spending and tax raise. US: spending and tax cuts.
See the difference?

tGunslinger wrote:
So the spending is irrelevant? If both gov’t’s spent, but one failed and one, according to you, will succeed, we can only conclude that tax cuts make the difference, and spending is irrelevant.

Yet you called the 36 Republicans who voted to amend the “stimulus” bill into 100% tax cuts “bat-shit insane”.

Care to justify your “bat-shit insane” comment? Or perhaps redirect it towards a different group of people in Congress?

[i]100meters wrote:
The spending is the opposite of irrelevant. It’s the most critical thing, the tax cuts don’t do that much, but get 2 senators to vote for the stimulus.

But yes, while stimulating you don’t want to then suck money back out with tax hikes. That doesn’t mean you need to emphasize the opposite, just emphasize the spending.[/i]

Let us add another historical example: The Great Depression. We tried governmental ‘stimulation’ then, and it failed miserably. It took WWII to get us out of that rut.

Unless you want to claim that FDR and crew lowered taxation and gov’t intervention, that’s now two strikes against ‘spending + tax hikes’.

Now, if we assume that your post above (bolded) has been officially retracted (given that it implies directly that spending is irrelevant), we may assume that you claim spending is the answer.

If we assume instead that your post above (italicized) is more representative of your stance, then we may assume that you claim ‘spending + tax cuts’ is the answer.

Then, we come to another question (and we are still assuming that I am an imbecile and cannot understand large words or leaps of logic): Why do we need the spending?

What is it, specifically, that the spending is accomplishing? What is it doing that we cannot do by ourselves?

If ‘spending + tax hikes’ does not work, why will making the small shift to ‘spending + tax cuts’ work? What is the mechanism by which spending causes the tax cuts to work?

Further, aren’t ‘spending’ and ‘tax cuts’ diametrically opposed? That is, adding them together merely reduces the effectiveness of either? That one without the other would be more effective? That combining the two is not even possible without foreign funding?

And given that we are still sitting on two strikes for ‘spending + tax hikes’, we can conclude that that end of the spectrum doesn’t solve anything? Thus leaving us with the conclusion that cutting taxes without spending would be the best solution?

Yet, you claimed that Senators who tried to do just that were ‘bat-shit insane’?

So again: why do we need the spending?

100meters wrote:
And clearly voting for tax-cuts only is bat-shit insane, but again, your party not know for success at economics, and hopefully after the last 8 years they never have to be taken seriously again.

And your mama’s ugly.[/quote]

WTF?
You have no idea what you’re talking about. In both cases “SPENDING” is the thing. The issue with the Japanese stimulus is the half-ass approach (not enough stimulus) plus raising taxes.

Better is huge stimulus, and some (targeted) cuts. The current plan would be better with more spending and lower tax cuts as a percentage. But yes, the main thing is SPEND!

The rest of your post doesn’t make sense and/or economically unsound or historically inaccurate.

Also from any economist’s/sane person’s perspective, voting for a tax cuts only stimulus is just stupidly insane. The payback or multiplier just isn’t worth it, essentially wasting the money.

47
48

[quote]Gambit_Lost wrote:
dhickey wrote:

Please explain why tax cuts only are not sufficient.

Here’s the IMF’s take on that answer. (posted yet again b/c you seem to have missed it).
[i]
As for the balance between spending increases and tax cuts, we think that there are two arguments why spending increases should be part of the package, probably more so than in the past.

"Consumers who are credit constrained are likely to spend any extra money derived from a lower tax bill."

First, the decline in private sector demand is likely to be prolonged. This implies that fiscal policy can rely more than in the past on spending measures, including investment in infrastructure, because we don’t need to worry so much about implementation lags.

Second, we believe that, in the current circumstances, the marginal propensity of consumers to spend tax cuts or transfers may be low, leading to low multipliers. That said, selectivity is needed in raising spending: direct purchases of goods by the government?investment spending in particular?has a direct effect on demand and will also have positive supply-side effects. In contrast, increasing public sector wages is unlikely to help and may be difficult to reverse. [/i]

[/i]
[/quote]

This defies logic. Let’s start with the boom and bust cycle. The boom is overspeculation and overinvestment in a particular market or just in general. The bust is the correction of boom. It returns demand, and therefore prices, back to normal. An artificial stimulous is just that, artificial. It prevents market forces from returning demand, prices, wages, resourse allocation, etc to normal.

They are creating artificial demand. They are artificially displacing resourses (labor and money). This is precisely what got us in this mess. Because this stimulous is artifical and can’t reasonably be continued for the long run, it is only prolonging and worsening the coming hang over. This is why even just tax cuts would not have a net positive result unless the cuts were made in a way that revenue would cover spending. what we need is for things to return to normal. Anything artifical is harmful. Resourses and money need to be directed where the market demands them.

This would be harmful enough if they were just robbing the free market, but they are doing much worse. They are inflating the money supply like it has never been inflated in the past. What does history tell us about hyperinflation?

We are going to pay way too big a price for any limited short term relief. We have plenty of speculation on the good some sort of stimulous would provide. Where is the speculation on what tens of trillions of dollars in artificial currency will do to us in the long run? The analysis of the debt and currancy explosion is most important analysis, yet seems to be conspicuously absent. Why is this?

I beleive Keynes said what many believe but will not admit. In referense to long run effects of economic, or more accurately monetary policy…“we are all dead in the long run”.

49

[quote]100meters wrote:

WTF?
You have no idea what you’re talking about.
[/quote]
are you kidding me? You are the one completely denying the existance of the business cycle and the harmful effects of inflation.
[/quote]
In both cases “SPENDING” is the thing. The issue with the Japanese stimulus is the half-ass approach (not enough stimulus) plus raising taxes.

Better is huge stimulus, and some (targeted) cuts. The current plan would be better with more spending and lower tax cuts as a percentage. But yes, the main thing is SPEND!
[/quote]
Money you don’t have? How will it be repaid to China?

Please tell us how you would know if something was economcally unsound? You obviously have not studied any sort of economics.

[quote]
Also from any economist’s/sane person’s perspective, voting for a tax cuts only stimulus is just stupidly insane. The payback or multiplier just isn’t worth it, essentially wasting the money. [/quote]
You are so off base here I don’t even know where to start. You need to read a book on economics. It is just silly to post on things you have absolutly no knowledge of. You can’t even take the time to read a single book on economics, yet you expect people here to take you seriously?

Central planning does not work. You cannot force the market to correct itself. You can only allow it to return to normal. Central planning has never worked. Why dabble in it?

Explain to me how spending money that doesn’t exist on projects that would normally not receive the investment can somehow return the market to normal. Not possible, never happened, never will.

Explain to me how on earth we are going to pay this back?

50

[quote]100meters wrote:
dhickey wrote:

Please explain why tax cuts only are not sufficient. Please explain how Republicans economic policy was harmful?

Funny. But sadly, some republicans aren’t pretending to be this stupid.

[/quote]

Very insightful. thanks.

51

[quote]Gambit_Lost wrote:
[i] Why I Support the Stimulus

By Arlen Specter
Monday, February 9, 2009; Page A17

I am supporting the economic stimulus package for one simple reason: The country cannot afford not to take action.

…
The legislation known as the “moderates” bill, hammered out over two days by Sens. Susan Collins, Ben Nelson, Joe Lieberman and myself, preserves the job-creating and tax relief goals of President Obama’s stimulus plan while cutting less-essential provisions – many of them worthy in themselves – that are better left to the regular appropriations process.

…
“In politics,” John Kennedy used to say, “nobody gets everything, nobody gets nothing and everybody gets something.” My colleagues and I have tried to balance the concerns of both left and right with the need to act quickly for the sake of our country. The moderates’ compromise, which faces a cloture vote today, is the only bill with a reasonable chance of passage in the Senate.

The writer is a Republican senator from Pennsylvania.
[/i]

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/08/AR2009020801710.html[/quote]

Arlen specter? great economic mind that one. You are absolutely brilliant. Posting some politician’s take.

52

How about the governement spend less money on stupid social programs, pet projects, and ‘entitlement programs’ (that one kills me - what exactly are they entitled to exactly?).

Combine that with a tax cut to encourage businesses to hire more people and buy more equipment.

Then you would have a better package.

53

[quote]dhickey wrote:
Gambit_Lost wrote:
dhickey wrote:

Please explain why tax cuts only are not sufficient.

Here’s the IMF’s take on that answer. (posted yet again b/c you seem to have missed it).
[i]
As for the balance between spending increases and tax cuts, we think that there are two arguments why spending increases should be part of the package, probably more so than in the past.

"Consumers who are credit constrained are likely to spend any extra money derived from a lower tax bill."

First, the decline in private sector demand is likely to be prolonged. This implies that fiscal policy can rely more than in the past on spending measures, including investment in infrastructure, because we don’t need to worry so much about implementation lags.

Second, we believe that, in the current circumstances, the marginal propensity of consumers to spend tax cuts or transfers may be low, leading to low multipliers. That said, selectivity is needed in raising spending: direct purchases of goods by the government?investment spending in particular?has a direct effect on demand and will also have positive supply-side effects. In contrast, increasing public sector wages is unlikely to help and may be difficult to reverse. [/i]

[/i]

This defies logic. Let’s start with the boom and bust cycle. The boom is overspeculation and overinvestment in a particular market or just in general. The bust is the correction of boom. It returns demand, and therefore prices, back to normal. An artificial stimulous is just that, artificial. It prevents market forces from returning demand, prices, wages, resourse allocation, etc to normal.

They are creating artificial demand. They are artificially displacing resourses (labor and money). This is precisely what got us in this mess. Because this stimulous is artifical and can’t reasonably be continued for the long run, it is only prolonging and worsening the coming hang over. This is why even just tax cuts would not have a net positive result unless the cuts were made in a way that revenue would cover spending. what we need is for things to return to normal. Anything artifical is harmful. Resourses and money need to be directed where the market demands them.

This would be harmful enough if they were just robbing the free market, but they are doing much worse. They are inflating the money supply like it has never been inflated in the past. What does history tell us about hyperinflation?

We are going to pay way too big a price for any limited short term relief. We have plenty of speculation on the good some sort of stimulous would provide. Where is the speculation on what tens of trillions of dollars in artificial currency will do to us in the long run? The analysis of the debt and currancy explosion is most important analysis, yet seems to be conspicuously absent. Why is this?

I beleive Keynes said what many believe but will not admit. In referense to long run effects of economic, or more accurately monetary policy…“we are all dead in the long run”.
[/quote]

lol. Where did you learn that a bust is a “return to normal”? a “correction of the boom”? nice. well at least you got the “boom” right.

At least now I understand your strange logic. You seem to believe that the US needs to deflate much more than it already has. This is a fair opinion. I simply disagree.

The argument that the IMF “defies logic” is, however, pure ideological fanaticism. It’s one thing to argue that you disagree, it’s another to mis-understand their arguments or deny that they are experts. Further if you think that arguments about inflation are “conspicuously absent” you’ve simply proven that you either didn’t read the articles, or didn’t understand them.

Honestly dhickey, I think you’ve got a shot at arguing with me intelligently. I think you’re smart and have a different philosophy than I have. But if you don’t bother to take the time to understand the arguments of the best in the field, you’re doing yourself a disservice and simply blowing smoke.

54

[quote]dhickey wrote:
Gambit_Lost wrote:
[i] Why I Support the Stimulus

By Arlen Specter
Monday, February 9, 2009; Page A17

I am supporting the economic stimulus package for one simple reason: The country cannot afford not to take action.

…
The legislation known as the “moderates” bill, hammered out over two days by Sens. Susan Collins, Ben Nelson, Joe Lieberman and myself, preserves the job-creating and tax relief goals of President Obama’s stimulus plan while cutting less-essential provisions – many of them worthy in themselves – that are better left to the regular appropriations process.

…
“In politics,” John Kennedy used to say, “nobody gets everything, nobody gets nothing and everybody gets something.” My colleagues and I have tried to balance the concerns of both left and right with the need to act quickly for the sake of our country. The moderates’ compromise, which faces a cloture vote today, is the only bill with a reasonable chance of passage in the Senate.

The writer is a Republican senator from Pennsylvania.
[/i]

Arlen specter? great economic mind that one. You are absolutely brilliant. Posting some politician’s take.[/quote]

My brilliance has little to do with copying an article from Mr. Specter. In case you hadn’t noticed, I’d already posted some of the greatest economic minds.

Also, if you hadn’t noticed, this thread is about the hackneyed political theater the republicans are “playing” (or were). This article would be an example of one who didn’t play that game. Come on dhickey, think, then post. I expect more of you.

55

[quote]Dr_Razor wrote:
How about the governement spend less money on stupid social programs, pet projects, and ‘entitlement programs’ (that one kills me - what exactly are they entitled to exactly?).

Combine that with a tax cut to encourage businesses to hire more people and buy more equipment.

Then you would have a better package.[/quote]

I understand that you don’t like the composition of the bill. This is a just argument. However, can we agree that there is a need for a stimulus bill? Most economists argue that the size and scope is correct, but there is disagreement over composition. Do you agree with them?

Politico reported yesterday that the current composition of the senate package was 44% tax cuts… how much more would you like to see? Compromise is the hallmark of a democracy, can support a bill that, while it doesn’t have everything you want, does have a lot of what you want? (Including size and tax cuts)

56

[quote]100meters wrote:
hedo wrote:
100meters wrote:
hedo wrote:
Here is the much talked about letter from the CBO to congress. Draw your own conclusions.

http://hotair.cachefly.net/images/2009-02/cboletter.pdf

Draw your own conclusions:

“would have a noticeable impact on economic growth and employment in the next few years.”

The actual CBO report:
http://cboblog.cbo.gov/?p=199

hedo, you don’t know what you’re talking about, hence moronic statements like “Obama will NEVER win Pennsylvania” (actual quote from a PA resident!) You have no credibility. None.

But if we’re going by the CBO, let’s go by their actual full report that says yes the spending/stimulus (same you dolt) will have the intended effect.

Yes and you called the election for Kerry in 2004. (actual quote from a MA resident). Fucking loser.

You need to actually read the report you dumbfuck before you speakout of turn.

The silly part is the letter the CBO is posted so anyone else here can read it too.

Try again, although the comedy you think passes for arguments are priceless. Almost as funny as Obama’s cabinet picks.

Never called the election for Kerry. Never. So next lie…

Again, if you’re basis for supporting/not supporting the stimulus is the CBO, they are for it. READ THE ACTUAL REPORT. Then come back apologize, and declare your support for the stimulus,or move on to a new made up reason.

[/quote]

Sure you did you’re just lying again…typical behavior. You have called every election for a democrat since you have been posting here…under your current screen name as well as your sock puppets.

I read it. You highlighted one sentence. Anyone else can read. Go away. You are making a fool of yourself…like your messiah.

Are you being paid by the post or on a retainer?

57

[quote]hedo wrote:
100meters wrote:
you dumbfuck before you speakout of turn.

You are making a fool of yourself…like your messiah.

Are you being paid by the post or on a retainer?
[/quote]

This is the kind of shit the country can do without. We’re in a crisis and you two are calling names.

Care to try to put together a coherent argument? How about reading/posting/thinking-about what some of the experts think? (psst…blogs don’t count).

[edit] posting the actual CBO article was good.

58

Speaking of some of the best minds in Economics:

[i]
5 Points on the Critical State of the Economy
By Jeffrey Sachs

Here is my general assessment of where we are from an economic point of view, putting the political dynamics mostly aside for the moment.

I believe that we should do much better on fiscal policy than we are doing as a nation.

(1) There is no room, nor case, for broad-based personal or corporate income tax cuts or credits or rebates. (Much smaller temporary subsidies of house and auto purchases, especially on fuel-efficient cars, make a little bit more sense, though I don’t love those either). The deficit is hemorrhaging and will do so for years to come. Despite some ideological claims to the contrary, there will be no scope for sizeable cuts in spending as a percent of GDP, since five core areas (defense and homeland security, veterans affairs, social security, health care, and interest on the debt) take up all federal revenues, meaning that everything else in the budget (education, energy, science, transport, housing, income support, diplomacy, courts, public administration) is effectively on borrowed funds. And with aging, health care cost increases, etc., the underlying chronic deficits will tend to rise, not fall. We will therefore need increased not decreased taxes. Finally, note that temporary tax cuts are likely to have little stimulus effect, even if they could be afforded;

(2) Immediate and sizeable spending increases in the stimulus package should be directed to a few areas: significant support for our crisis-ridden state and local governments, especially for health (Medicaid), education, and other urgent public services; income support (unemployment, anti-poverty including food stamps and child nutrition); health care coverage for the uninsured (as well as adequate Medicaid funding mentioned earlier); and a significant multi-year rollout of infrastructure of all sorts (roads, rail, other mass transit, ports, water, energy, broadband, etc.)

(3) Future taxes (and revenues as a share of GDP) will have to increase, partly by rolling back the Bush tax cuts on the wealthy (certainly), and partly by introducing new revenues on carbon (e.g. by auctioning carbon permits or taxing carbon) and eventually I believe by introducing a VAT or something similar.

(4) The claim that we should reject infrastructure spending because it rolls out over several years is disastrously wrongheaded. We need a buildup of serious high-return public investments, and we can and should start now. The added stimulus will be useful in future years, but even more useful will be the infrastructure! The most rapid spending will come from sizeable immediate transfers to state and local governments, to the poor, to those without health insurance, and the start-up of some infrastructure spending, and this initial boost will be enough to “buy time” for a sustained and meaningful growth in infrastructure in later years.

(5) We need a medium-term expenditure framework in which budget and tax policies are presented with a five-year time horizon. In such a medium-term framework, we would have significant deficit spending this year – yes, perhaps $1 trillion in total not counting TARP – but then falling over time by a programmed step-by-step increase in government revenues (rollback of tax cuts, new carbon levies, closing corporate loopholes, and probably introducing a modest VAT). The spending side will eventually taper off in certain categories (e.g. the emergency transfers to the state and local governments), but overall medium-term levels of public spending are likely to increase from 21 percent of GDP to perhaps 24 percent of GDP. Revenues should increase from around 18 percent of GDP to around 24 percent of GDP over a period of 5-7 years.

Such a package would require several weeks to put into motion, and some parts might require several months, but that would be time well spent if we would thereby restore a sensible fiscal framework. It would be better to set the medium-term direction of fiscal policy, and to get it right (significant short term stimulus through spending not tax cuts, rising public investments in infrastructure over several years, and a rising trajectory of taxes relative to GDP) over the course of a few more weeks and even months, rather than to do things haphazardly and unconvincingly within a deadline of a few days.

Of course, to give the administration its real due, it might be impossible to achieve anything if the opposition proves unmovable to this kind of package, so taking something highly flawed now rather than a better framework that is never enacted (!) would make sense. I regret and worry, however, that we haven’t yet had the kind of public discussion about what’s really needed for the medium term, and how we can get there. I don’t really know if it’s “now or never.” If that’s true, let’s have the legislation now. It just doesn’t feel right to me, however. And I do worry that the tax cuts and coming mega-deficits might well frustrate a subsequent convergence on a more meaningful and sustainable trajectory in the coming months and years.

Finally, this is not meant to be a comprehensive agenda, only a sketch of broad macro policy. We need major systemic reforms in health, energy systems, foreign policy, science and technology, and much more, which will have significant budgetary implications, but which requires ample public debate and policy formulation.

Finally, finally, there is a massively important global context which is not even discussed in our current debates. The role of Asia in helping to get the U.S. and Europe out of this mess should not be underestimated. Attacking China is completely wrongheaded in that perspective. We need policy coordination, not bickering. There are important exchange rate, monetary, and financial policy considerations at a global cooperative level which can and should speed recovery.
Jeffrey D. Sachs is the Director of The Earth Institute, Quetelet Professor of Sustainable Development, and Professor of Health Policy and Management at Columbia University. [/i]

http://www.realclearpolitics.com/articles/2009/02/5_points_on_the_critical_state.html

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No matter what Obama or anyone else does, the debt will not disappear. It must either be defaulted or inflated away. In either case, we’ll have a massive depression and the introduction of outright National Socialism (private ownership, but administered by the State).

The debate is over. The argument over the contents of this bill is meaningless.

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[quote]Gambit_Lost wrote:
Most economists argue that the size and scope is correct, but there is disagreement over composition. [/quote]

What is this statement based on?