It’s already begun. Even though public opinion is strongly in favor of a bailout for the American people, even if it is to the tune of $800 billion, and even though economists across the political and academic spectrum have been screaming that now is not the time to worry about the deficit (because GDP:deficit ratios are still manageable – although they may not be if we let this go much longer), the conservatives are mounting a massive campaign to try and wrench back the title of fiscal responsibility from the only party that’s ever really exhibited it.
While the Republicans try to stand in the way of spending programs that will actually benefit Americans, businesses, and create jobs, they’re all about handing over more money to the banks and financial institutions that got us into this mess without strings to keep them from sitting on it like they have up to this point. To that end though, there are some fantastic myths about Obama’s fiscal recovery plan, and exactly how wrong they are, and Sara Robinson, writing for the Campaign for America’s Future, have put a few to paper and called them out for the untruths they are.
For example, to the notion that it’s simply too big:
1. The proposed recovery package is too big.
False. Most progressive economists agree (and Paul Krugman is downright emphatic) that it’s going to take a minimum of a trillion dollars of well-placed investment to pull our economy out of this ditch. This is no time for half-measures, blue-ribbon committees, pilot projects, or trial balloons: this is a life-or-death crisis that requires immediate and massive intervention.
CAF Senior Fellow Bernie Horn puts it this way: “The American economy is huge and it’s at a standstill. It’s like a motionless 100-car freight train — or one going backwards slowly. A small locomotive simply can’t pull it forward. We need an engine large enough to work, one that can create millions of jobs. If anything, a $775 billion 2-year plan may be too small rather than too big.”
Dean Baker of the Economic Policy Institute echoed this same thing on MSNBC’s “Countdown” last Tuesday night. It’s got to be big. And it’s got to be now. Anything too small — or too late — and the American economy will be at serious risk of stagnating the same way Japan’s did in the 1990s.
Or alternatively the absurd notion that the private sector can handle this and take care of it without government intervention:
3. It’s more important to balance the budget. Fix that, and the rest will take care of itself.
Read history much? Herbert Hoover is history’s poster boy for the idea that balancing the budget during a recession is the best way known to turn it into a full-on depression. And that wasn’t a one-off: FDR repeated the lesson in 1937, when he succumbed to the pleas of budget-hawk conservatives and tried to balance the budget — a move that put the brakes on what had, until then, been a solid recovery.
Looking forward, this year’s numbers also show the case clearly. Economists are already estimating that spending by individuals and businesses will be off by $300 to $500 billion in 2009. The upshot of this will be millions of lost jobs, which in turn will mean even lower spending and more job losses next year as the country accelerates toward depression.
The only way to halt this slide is for the government to step in and fill the hole with an additional $300 billion-$500 billion of its own spending — and to spend that money on investments that will create as many jobs as possible. The longer we wait, the more government spending it will ultimately take to pull us out of this — and the less able we’ll be to muster that much cash.
This one is particularly entertaining to me, because it’s the Libertarians trying to crawl out from under their rocks and pretend that the past year just hasn’t happened, and that the fiscal policies of the past 8 years had nothing to do with any of it. If there’s anything we’ve learned from the financial and economic crisis that we’re in now it’s that the markets aren’t self-regulating, self-beneficial, self-regulating entities. They’re masochistic, self-mutilating beasts that will cut off their own hands if they think it’ll make themselves stronger only to find they’re now bleeding to death and don’t have the tools to exert their strength. It’s ridiculous, and proof positive of what progressives have been saying for years: the laissez-faire approach simply doesn’t work over the long haul – it just leads to cyclical bubbles with good times followed by hard stops. The markets need a strong guiding hand in the form of solid (but not overly invasive, and invasive by the definition of the people, not the private sector) regulation.
The Libertarian crowd went running into the shadows when the economic bubble burst, and their most sacred institution – the markets – went up in flames thanks to its own misguidedness. Now they’re out trying to affect policy again, and at least for the time being it’s just laughable. Let’s try to keep it that way.
[ 10 Absurd Conservative Myths About Obama's Recovery Plan ]
Source: AlterNet