The Republicans depend on being able to misinform the population. Is it any wonder they attempt to “elitise”anyone presenting an intellectual argument to the reasons their policies fail and continue to fail.
Unfortunately unlike basic Math and English, Economics is not taught in high schools as a requirement. As such the GOP is able to make arguments that seem plausible to the uninformed. Given that the diminutiveness of the stimulus ensured that while a depression was averted, it was not sufficient to give the economy a strong kick start. Unless the masses have money to spend the economy will not comeback.
If one studies what the Bush tax cuts to the wealthy have done, one will realize that it took immediate spending out of the economy since given the wealthy’s marginal propensity to consume is not enhanced substantially by further wealth. Moreover their investments of said marginal wealth may not even be in the United States. Had the same tax cuts been funneled to the middleclass and increased on the wealthy, the economic engine would be in more balance. Every economist that sticks to numbers and not ideology knows this.
Last week’s employment report served to reinforce the utter bankruptcy of Republican economic policy — and the absolute necessity of remembering the lessons of the last century of economic history.
The private sector job market is slowly stumbling out of the economic ditch into which it was steered by the policies of the Bush Administration. Sixty-four thousand private sector jobs were created by the economy last month — well short of what is necessary to allow the job market to achieve lift-off velocities and long-term sustained growth — but a least a positive number.
But that growth was entirely offset by the loss of 159,000 government jobs. Some of them were temporary census jobs. But the bulk — including the loss of 26,000 teachers — came from layoffs caused by the fiscal crunch of state and local governments. State and local governments cut jobs at the fastest rate in almost 30 years. The loss in jobs would have been even more massive if Democrats in Congress had not passed a bill to aid state and local government before they adjourned for the August recess. That bill was passed over virtually unanimous Republican opposition.
The Republicans have traditionally offered four major elixirs as their prescriptions for economic growth:
1) Cut taxes — especially for the wealthy. In fact, of course, tax breaks for the rich are mainly about giving more money to the Republicans’ major constituency — the wealthiest of our citizens. The fig leaf they have used to cover this self-serving policy used to be described as "supply-side" economics: the idea that if you give the wealthy and big corporations more money they will automatically invest it in new economic ventures that generate jobs.
Of course this proposition completely ignores actual economic history. The Bush tax cut policy was in place for much of the last decade. But his administration created a net increase of zero new private sector jobs — zero. In fact, of course, it is still in place today — due to expire at the end of the year, unless Republicans have their way — and it has done absolutely nothing to create new jobs. In fact, just the opposite.
Right now, corporations and the rich are rolling in cash. Why don’t they invest it, expand capacity and create jobs growth? Simple. There is not enough demand. To have economic demand you need consumers who want to spend money. But tax cuts for the rich have just turbo charged the overall tendency of our economy — and especially the overgrown financial sector — to concentrate more and more money in the hands of the top 2%. And that means there is less and less for ordinary people to spend on goods and services and not enough demand to entice all of those corporations to expand and hire more workers, which in turn further depresses demand.
And what is even worse, tax cuts for the wealthy deprive the government of funds that it can use to jumpstart demand and end this vicious cycle — which leads me to prescription number two.
2). Cut government spending. It should be lost on no one that the proximate cause of the reduction in employment last month was layoffs by state and local governments. Much of the fiscal pressure on state and local government came from the end of funding from the original federal stimulus bill which was opposed by most Republicans. Of course the Republicans also worked long and hard to stall the additional $22 billion aid package for state and local governments that finally passed Congress in August. And they assured that the package proposed by Democrats was cut in half before it could get the 60 votes needed to get out of the Senate.
In fact, cutting government spending before the private sector has achieved sustained job growth is a recipe for economic disaster.
Robert Creamer: If You Like the Recession, You’d Love "Speaker Boehner"
