Two writers at The New York Times have embraced the fallacy that cutting government spending is keeping the economy from growing. It is Keynesian claptrap.
Let's let them rant a little before responding:
The nation's unemployment rate would probably be nearly a point lower, roughly 6.5 percent, and economic growth almost two points higher this year if Washington had not cut spending and raised taxes as it has since 2011, according to private-sector and government economists.
After two years in which President Obama and Republicans in Congress have fought to a draw over their clashing approaches to job creation and budget deficits, the consensus about the result is clear: Immediate deficit reduction is a drag on full economic recovery…
Tax increases and especially spending cuts, these critics say, take money from an economy that still needs some stimulus now, and is getting it only through the expansionary monetary policy of the Federal Reserve.
They (naturally) support whatever the president supports:
In all this time, the president has fought unsuccessfully to combine deficit reduction, including spending cuts and tax increases, with spending increases and targeted tax cuts for job-creation initiatives in areas like infrastructure, manufacturing, research and education. That is a formula closer to what the economists propose.
There is so much that is false in this that I scarcely know where to begin. Let's start by asking, just how much are we talking about? The economy is generating about $15 trillion worth of goods and services every year. The government is spending about $3.5 trillion a year. The cuts in government spending (if they are to be believed) are about $85 billion a month. They are being staged in, with the full impact not likely to be felt for months. The tax increases are siphoning about $50 billion out of the economy every month. So the net impact is about $35 billion a month, maximum. That's one percent of government spending. That's two-tenths of one percent of total GDP. How can this have any kind of impact, either way?
The president wants to “invest” in “job-creation initiatives like infrastructure, manufacturing, research and education.” Question: how successful has the government ever been in making good choices with other peoples' money in such things? And yet, more is proposed.
I'd like to turn the authors' quote from the president back on itself. Here's what the prez says:
How are we making sure that we're investing in things like rebuilding our airports and our roads and bridges, and investing in early childhood education, basic research – all the things that are going to help us grow?
I have the answer! Let the states or the private market make these decisions. The states, because they're closer to the taxpayers and thus are more responsive (hopefully) to real needs, and the private market because it makes much better decisions because its their money! Aside from the limitations in the constitution which no one in Washington cares about anymore, private capital has always made better decisions, and thus has always been the real jobs creator. But no, obama and the Keynesians are in love with government. It is the tool to solve all problems. More is better.
Talk about making a mountain out of a mole hill! This article does nothing but promote falsehoods in order to bash whatever is left of Republican common sense. In that, it succeeds.
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