It's clear that from the start, the Obama administration has proposed a stimulus package that's at lower than what was suggested as necessary. And it's also pretty clear that he did this in the hopes of gaining bipartisan support. If you remember, back in January, they hoped to get as many as 80 votes in the senate.
Instead, Republicans rejected it unanimously in the House, which they tend to do once they are out of the presidency. Just rampantly opposing any and everything. Instead, most voted for the DeMint amendment, which would have thrown out all the spending and replaced it with permanent tax cuts. They said the stimulus was a terrible idea, filled with pork. However, in saying that, they would have to be denouncing things that weren't even in the bill.
For instance, an aide to John Boehner, the House minority leader, said the stimulus bill would spend $30 million protecting a mouse near Nancy Pelosi's district. No such thing existed in the bill. Boehner and others from his party also said the bill would spend $8 billion on a high-speed rail link between LA and Las Vegas. Again, nothing like that in the bill.
It's clear how clean the bill is when republicans have to make up stories about how wasteful it is.
The Republicans also insisted that the bill would leave huge costs on future generations. John McCain called it, "generational theft." We know the US government has a long-term financial problem. The Tax Policy Center estimated the "fiscal gap" (difference between spending and revenue under current policy) at around 4 to 6 percent of the gross domestic income. The cost of the stimulus will only add .012% to that gap. Looking back at what the Republicans have supported over the last eight years, .012% is nothing.
Bush tax cuts -$2 trillion
Iraq War - at least $1 trillion
The stimulus will clearly be a much smaller burden in comparsion.
The Republicans are hypocrites anyway, in saying the stimulus bill will burden future generations. The tax cuts in the DeMint bill, which was supported by a majority of Republicans including McCain, would cost approximately $3.1 trillion dollars over the next 10 years.
That is FOUR TIMES as much as the stimulus package.
The Republicans last attempt at an attack was saying that financial stimulus just doesn't work. According to "conservative expert" Brian Riedl of the Heritage Foundation, "Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. You're not creating new demand, you're just transferring it from one group of people to another." Borrowing from domestic lenders, according to him and others like him, cuts into available money for investments and borrowing from foreign leaders cuts into exports.
The flaw in that argument is found in the very crisis we're in now.
Government spending comes at the expense of private spending when the economy is at full employment. But we're currently suffering from "the paradox of thrift." Everyone is saving more even though prices are falling all over the place. The savings has nowhere to go. In borrowing extra money and using it to finance temporary budget deficits, the government can help sustain the economy. In times like this, spending by the government can be a way of getting unemployed resources working.
Based on the strong opposition to the bill, was Obama wrong in seeking bipartisanship? I say yes, though hindsight is always 20/20.
To get enough votes to prevent a stalemate in the Senate, Obama had to appeal to those select few "moderate" Republicans by making what was already a weak plan, even weaker, taking away spending, aid to states, and filling it up with tax cuts. Rahm Emanuel claims that this shows the Obama plan was the strongest. But the moderates would have bitched anyway and Obama aimed way too low by proposing the weak bill.
Unfortunately, no matter how you see things, the whole thing ended with a bill that will only keep things from getting worse, not help us get stronger.
Instead, Republicans rejected it unanimously in the House, which they tend to do once they are out of the presidency. Just rampantly opposing any and everything. Instead, most voted for the DeMint amendment, which would have thrown out all the spending and replaced it with permanent tax cuts. They said the stimulus was a terrible idea, filled with pork. However, in saying that, they would have to be denouncing things that weren't even in the bill.
For instance, an aide to John Boehner, the House minority leader, said the stimulus bill would spend $30 million protecting a mouse near Nancy Pelosi's district. No such thing existed in the bill. Boehner and others from his party also said the bill would spend $8 billion on a high-speed rail link between LA and Las Vegas. Again, nothing like that in the bill.
It's clear how clean the bill is when republicans have to make up stories about how wasteful it is.
The Republicans also insisted that the bill would leave huge costs on future generations. John McCain called it, "generational theft." We know the US government has a long-term financial problem. The Tax Policy Center estimated the "fiscal gap" (difference between spending and revenue under current policy) at around 4 to 6 percent of the gross domestic income. The cost of the stimulus will only add .012% to that gap. Looking back at what the Republicans have supported over the last eight years, .012% is nothing.
Bush tax cuts -$2 trillion
Iraq War - at least $1 trillion
The stimulus will clearly be a much smaller burden in comparsion.
The Republicans are hypocrites anyway, in saying the stimulus bill will burden future generations. The tax cuts in the DeMint bill, which was supported by a majority of Republicans including McCain, would cost approximately $3.1 trillion dollars over the next 10 years.
That is FOUR TIMES as much as the stimulus package.
The Republicans last attempt at an attack was saying that financial stimulus just doesn't work. According to "conservative expert" Brian Riedl of the Heritage Foundation, "Every dollar Congress injects into the economy must first be taxed or borrowed out of the economy. You're not creating new demand, you're just transferring it from one group of people to another." Borrowing from domestic lenders, according to him and others like him, cuts into available money for investments and borrowing from foreign leaders cuts into exports.
The flaw in that argument is found in the very crisis we're in now.
Government spending comes at the expense of private spending when the economy is at full employment. But we're currently suffering from "the paradox of thrift." Everyone is saving more even though prices are falling all over the place. The savings has nowhere to go. In borrowing extra money and using it to finance temporary budget deficits, the government can help sustain the economy. In times like this, spending by the government can be a way of getting unemployed resources working.
Based on the strong opposition to the bill, was Obama wrong in seeking bipartisanship? I say yes, though hindsight is always 20/20.
To get enough votes to prevent a stalemate in the Senate, Obama had to appeal to those select few "moderate" Republicans by making what was already a weak plan, even weaker, taking away spending, aid to states, and filling it up with tax cuts. Rahm Emanuel claims that this shows the Obama plan was the strongest. But the moderates would have bitched anyway and Obama aimed way too low by proposing the weak bill.
Unfortunately, no matter how you see things, the whole thing ended with a bill that will only keep things from getting worse, not help us get stronger.
