Stimulus Passes Step One
One of the remarkable things about the stimulus debate is that it has devolved into a simple partisan stand off. I happen to think partisan politics is healthy since it gives voters a clear choice. Yes the bickering and posturing can be annoying, but a strong democracy needs more than one opinion. And this debate has given us exactly that: two clear and very different choices. Here’s the New York Times report on the vote: House Approves Stimulus With No Republican Support
The entire discussion has taken very little time, in American political terms at least. The outcome is extremely flawed: the package is piecemeal, too small, and stuffed with tax breaks that will accomplish nothing of note. All these flaws stem, in my opinion, from the unnecessary bipartisan nature of the initial discussions.
It was evident from the beginning that the Republican approach to the debate was to abandon bipartisanship in favor of articulating their own view. I disagree with their policies in this case, but I applaud them for avoiding the bipartisan sham.
We need clarity from our leadership. Constant sharing through bipartisan efforts dilutes responsibility and accountability. If the plan doesn’t work we now know who to blame. That’s the way it should be. Hopefully Obama has learned this lesson. Equally: I hope the losses he incurred during this debate are worth the repayment he obviously expects at some future date. Do we now ‘expect’ the two Maine Senators to vote with Obama on health care reform? I hope so. Otherwise this show of bipartisanship was for naught.
On the subject of economics: I continue to be amazed at the stubborn refusal of the GOP to recognize the extent of the failure of their ideas. The alternative stimulus they proposed consisted entirely of huge tax cuts, primarily the abolition of payroll tax. Cutting out payroll tax would have been far more stimulative than the 2001 and 2003 tax cuts since it is a far more regressive tax and has a much bigger impact on low wage earners. But it would have enabled them to argue that Social Security was defunded. I doubt that they had any intention of allowing that defunding to go unnoticed.
The big take away from this crisis, one that the GOP does not want to learn, is that singular reliance on market forces to correct all that ails an economy is a fallacy. Tax cuts do not work all the time. And government has an active role to play.
In times of crisis people are more likely to save than spend any tax rebates. So we need Government spending. This is text book stuff, at least if you read an older text book written before Milton Friedman and his followers expunged Keynes from economic theory.
And one last thing: it strikes me as a tad disingenuous for Republicans and other right wingers to whine about the huge deficits we will be generating for future taxpayers to repay. The budget impact of everything that has been done so far, including TARP, is nowhere near as big a debt creation as the Bush era tax cuts. And at least this was done with a strategy in mind. So please guys: stop the carping. Go get some new ideas. We need a healthy political debate, not a re-run of the palpable failure of the last eight years.
In the absence of a strong opposition party we just have to hope the Democrats do not overreach. Judging but the rubbish they tried to stuff into the first draft of the stimulus bill that looks like a forlorn hope.
