The Republicans are willing to put the brakes on now despite the fact that the economy has not gained enough lift to take off. Indeed, their deficit-mongering is already causing a drag, which is slowing down the economy, and may well make it crash again. It is precisely the policy that Hoover notoriously embraced.
More surprising is that many Democrats do not dare point out the ill effects of this GOP maneuver. Privately they acknowledge that more stimulus is now needed and that deficits will become a problem only later, but they claim this sounds like "political double speak." For that reason they, too, tend to at least make Hooverite noises.
However, when I asked a bunch of primary school kids if they understood that the need for heating in the winter does not deny the need for air conditioning in the summer, sure to follow, they had no difficulties in coping with such a 'complex' thought.
Neither did Ben Bernanke, who testified before a House committee early in June this year that, in the succinct words of The Wall Street Journal, "if Congress pursued more fiscal stimulus to sustain the recovery, it should be accompanied by a concrete plan to bring the deficit back into line in the long run. But he [Bernanke] indicated the economy is too fragile to begin reducing the gap now."
Moreover, only a very untutored reading of public opinion polls will lead one to conclude that the public favors deficit reduction now. Thus, asked if they are concerned about the federal debt, a large majority expressed concern -- but only because this is a so-called "no costs" question. It is like asking if you like to have a free dinner. Much more revealing is that when Americans were asked what they would rather spend money on -- cutting the deficit or creating jobs -- more people favored jobs over deficit reduction (by 50 percent to 42%). Another poll shows only 30 percent willing to make cuts in government spending on health care or education to reduce the deficit, versus 62 percent who are opposed! More are willing to cut the military budget, but not as many as those who would rather not reduce the deficit.
President Truman once remarked that if you run a Republican (meaning a Democrat who acts like a Republican) against a Republican, a Republican will win every time. The same holds here. If Democrats try to compete as to who is the holier deficit cutter, expect the Republicans to win. This is not merely bad news for the Democrats, but for the country. The economy now needs more lift, not more drag.
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Thanks largely to the attempts by Wall Street to suppress the EU economies and to destroy the Euro, the countries of the Euro zone have enacted tough austerity measures that are already starting to pay off. The Euro is back over $1.30 in case you have not noticed, and Germany's exports grew more than 4% in June (Imports also grew).
We need to focus on things that help us produce value and increase the standard of living of all our citizens. We need to fix Social Security, cut defense spending, and invest in our own infrastructure. We can stimulate job growth by enacting an environmentally responsible and sustainable energy policy. There are plenty of opportunities. Will someone kindly step up and LEAD?
Maybe instead of criticizing the social support system in Europe, we should learn from it. I know, I know, it wasn't invented here; we cannot possibly accept any ideas coming from outside sources. That would be, well, un-American.
If you rely upon the arguments presented in the comments on this topic one could easily conclude that neither would work and we are doomed. Could it be that either pursued with confidence and consistency, along with cleaning up some other systemic problems with our system, and taking a long term view could lead to prosperity for our citizens and nation? Just some food for thought.
Is it the constant wrangling and debate that is the problem? Maybe we just need leadership to provide leadership. We need to set consistent (to the wealth building philosophy), achievable goals and pursue them. I don't think it is possible without some pain and suffering, no matter what path we take, but maybe it is possible. Wishy washy, flip flopping, mud slinging, blame throwing, leaders may be the largest hindrance of all!
This is the wife beater complaining his knuckles hurt (after punching his wife out).
You're preaching to the choir, write your congress person