Friday, February 01, 2013

Republican economic incoherence

By Frank Moraes

This morning, Greg Sargent writes, We all agree that spending cuts hurt the economy. Right? Right. Right now, the Republicans are claiming that spending cuts will help the economy. Of course, six months ago, they were saying the opposite. But this is nothing new. The truth is that Republicans are incoherent on economic issues.

They will always claim that tax cuts help the economy. This is true. As long as those cuts are not offset with spending cuts. But that's getting too complex for Republican thinking. Why do they think that tax cuts spur the economy? Because they give people more money that they can spend and this feeds back in the economy. The obvious question is then: doesn't government spending do exactly the same thing?

That's when we move into Republican incoherence: spending is bad because we can't afford it, blah, blah, blah. But a dollar of spending costs exactly the same as a dollar of tax cuts. So I don't even know how we are supposed to deal the Republicans on economic matters. They are either incoherent or they are disingenuous.

Actually: I think they are both. I think they don't understand the economics at the same time that they will use any argument to justify what they want to do. Right now what they want to do is hurt the economy. But if they controlled the White House they would favor policies that helped the economy: Keynesian policies.

It isn't just politicians who act this way. Harvard University economistGreg Mankiw, widely respected in his field, was against the 2009 stimulus package. But when he worked for Bush Jr, he was all for stimulus. If that isn't an indictment of the economics profession, I don't know what is. I don't think we see this on the left, but on the right the first step in determining what to do to help the economy is to find out which party is in the White House.

We may be past the time when the Republicans will explicitly hold the US economy hostage over things like the Debt Ceiling. But they are still doing it implicitly by countering any good policies whenever they aren't in power. This is a new level of cynicism. And there is no choice but to do what John Boehner claims Obama wants to do to the Republican Party: annihilate it.

Who's with me?!

(Cross-posted at Frankly Curious.)

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