Thursday, February 24, 2011

Goldman Sachs Says GOP Budget Plan Will Hurt Economy

An addition to our debate from last week. Seems like a stronger economic recovery could help the deficit through increased revenue, but House GOP plan could actually slow recovery by cutting spending too quickly.

7 comments:

Ryan Karerat said...

I think Republicans know this. And I don't think they particularly care. We heard McConnell the day after the midterm elections: The #1 priority of the Republican Party is getting Obama voted out of office in 2012.

So massive spending cuts, job-losses, and economic pain are all fine and dandy for them. They play to their base by shrinking government, and Obama gets hammered for the hurting economy. The entire Republican agenda right now is basically to try to smash the Democrats at their knees: weaken or even eliminate the unions, shut down the government and seize their media mouthpieces to push the blame onto Democrats, de-fund Obamacare while fighting it in court, and most of all, make sure the economy doesn't recover. Because as long as they trot out their 'young gun' Paul Ryan and he whispers sweet nothings into America's ears about how smart his proposals are, they're betting Americans will fall hook, line, and sinker for it.

Is there an award for having become the most disillusioned with politics over the course of this program?

Megan said...

I agree. The Republican game plan is to single- handedly destroy the country. Or possibly they really believe that smaller government will lead to economic growth.

PBM said...

I am pretty disillusioned as well. The Republican strategy is extremely cynical yet they were overwhelmingly voted into power in the 2010 elections. I don't know if that would be the case if people had more thorough understanding of the issues. The total debt is not a near term problem, cutting spending could send the economy into a tailspin (as it did when FDR tried to balance the budget during the Great Depression, and what's happening in Great Britain now), government programs, while sometimes wasteful, are meant to help society, the health care bill is very moderate, the stimulus included tax cuts for 98% of Americans, global warming is real and reacting to it will be very expensive, massive tax cuts for the rich don't necessarily lead to economic growth and definitely don't increase tax revenue, and Obama is a Christian American. I could go on and on, but it won't change the fact that Obama and the Democrats have been unable to make these facts known to the public. It amazes me how far Republicans have gotten off of lies and how Democrats have laid down and let GOP talking points take hold in our national debate.

Ryan Karerat said...
This comment has been removed by the author.
Ryan Karerat said...

"I agree. The Republican game plan is to single- handedly destroy the country. Or possibly they really believe that smaller government will lead to economic growth."

In the long term, yes. But in the short term, I very much believe they aren't interested in making things better. McConnell said himself that the number one priority for the Republicans is getting Obama voted out of office. Not improving the economy. Not creating jobs. It's an explicitly political goal, not a policy one, and so I'll take them at their word. You can't tell me after seeing how selective they are about when deficits matter (when it means curtailing union rights or getting to take an ax to government programs) and when they don't (when it's extending corporate tax breaks or other tax relief for wealthier Americans) that they aren't playing pure politics with this stuff. Not that Democrats don't do the same thing, but there's a fundamental lack of cohesion or honesty around the GOP's budget-cutting maneuevers.

When the debate was over whether to extend the Bush tax cuts for the wealthiest Americans, the refrain was: "We need to extend them for everyone, we're in a recession, raising taxes on anyone is wrong. Deficit be damned!"

But now, all of a sudden, the deficit matters more than the welfare of Americans in the midst of the recession? Could it possibly be because the people now being targeted in the shorter-term are a more Democrat-oriented constituency (ie. poor people, union members, federal employees)?

Megan said...

I would argue that the GOP is listening to its constituents. The landslide victory for Republicans in the House, and the strength of the Tea Party showed the Nation's distrust of big government. These leaders weren't pretending to be moderate during election time they were threatening to do exactly what they are doing now. And yes, politics are involved. I'm just not sure if their main goal here is destruction (at least not to the extent that you are suggesting.)

I would also argue that Obama's recent actions (proposing a budget with no hard decisions, ignoring entitlements, pretty much ignoring the union protests, barely giving support for huge pro-democracy movements in the Middle East, lack of support for gay marriage) show that he is more worried about pissing people off than doing what is best for America. The Dem's (or at least the Administration's) only goal right now is getting Obama re-elected.

PBM said...

Megan, I agree with some of what you said and disagree with some of it. First, Republicans did promise a lot of cuts when they were running for office and were listening to their constituents in the debate over the CR. Where I think you have it wrong is that they didn't act moderate. I would argue that in the run-up to the election, GOP candidates attempted to appear more moderate by not saying what they were going to cut. They said they were going to cut government programs, but they didn't say they were going to end community service programs, end food stamps for poor children, end aquatic and environmental restoration programs, and cut funding for public broadcasting. So, yes they did say they were going to cut government, but they tried to seem more moderate by not talking specifics (which is, in my opinion, a huge deception.)

Now, for Obama. I agree that he is worried about his own reelection and that it may even be one of his primary concerns. But, much of his reelection relies on the rebound of the American economy, which means that he and the nation's fates are intertwined. The GOP, on the other hand, wants Obama to lose, and if he is credited with economic recovery, then he might win, which is why Ryan and I are arguing that Republicans might not want the economy to recover.

Obama has made some political decisions (support of gay marriage) lately, but I think the economy and jobs are his top priority because if the economic picture doesn't brighten by November 2012 then he will likely find himself out of office. If my # 1 priority was getting Obama voted out of office, then I would do everything in my power to make sure the economy doesn't recover before 2012.