Sam Uretsky

GOP Flunks Economics 101

Some day, when our great-grandchildren are huddled around a fire in an old oil drum trying to keep warm, one of them will ask “how did civilization end?” and the answer will be “a man named Grover Norquist got Republicans to sign a pledge never to raise taxes.” It’s not clear whether it’s ignorance or malevolence, but the modern Republican party appears to be so afraid of Mr. Norquist and his Americans for Tax Reform that they’re offering two choices – destroy the United States economy, or destroy the world economy, because the alternative of asking hedge fund managers and Fortune 500 CEOs to toss a few dollars into the kettle is unacceptable.

Unfortunately President Obama’s reelection campaign is based on the slogan “you should see the other guy.” Certainly he deserves to win, but his support may be based less on his own achievements than on comparison with the Republican attacks on Medicare, unions and National Public Radio. In 2009, when he should have been fighting for a proper Keyenesian stimulus package as a response to the economic downturn, President Obama reached an accommodation with the Republicans and settled for too little money, and even that was partially in the form of tax cuts. Having offered an inadequate and inefficient stimulus, President Obama moved on to health care, where he rejected even the compromise of the public option. President Obama has good intentions, but while Progressives were begging him to start fighting, he kept his cool and reached accommodations and compromises. It was like assuming a shark will get full and stop eating.

In spite of everything, President Obama is still trying to get along. In his July 2 radio address he said “Government has to start living within its means, just like families do. We have to cut the spending we can’t afford so we can put the economy on sounder footing, and give our businesses the confidence they need to grow and create jobs.”

Having made the initial mistake in 2009, he has effectively let the Republicans set the terms of the debate. Having given in to the patently false analogy of running the government like a family, he said some nice things about investing in infrastructure and education, but it’s already too late. A government is not a business, not a family, and as far as spending is concerned, it should be the yin to a family’s yang, a sine to a family’s cosine.

The rudiments of macroeconomics date back to Genesis 37: 25-36, the story of Joseph and the Pharaoh, when Joseph increased taxes by collecting grain during the years of plenty and redistributed the grain during the years of famine. Unfortunately, the Republicans under President Bush didn’t build up a surplus, or even maintain a balanced budget, when they had control, but the answer to improving economic conditions remains stimulation through deficit spending, even if the nation’s indebtedness continues to grow. The alternative, cutting spending, will simply cost more jobs and drive the economy further down. President Obama’s role should be to use the bully pulpit to teach economics 101 and explain why bad times are the right time to spend. He didn’t, and walked into the trap.

The Republicans have raised their demands for their votes to raise the debt ceiling and now want, in addition to trillions in spending cuts, a balanced budget amendment to the Constitution. It sounds good, to people who have heard over and over that the government is addicted to spending, the idea of a law that will restrain Congress is going to seem perfectly reasonable. There was a time when prohibition seemed like a good idea too.

Even using the analogy of a family, the insistence on a balanced budget is just wrong. Families go into debt for good reasons: to pay for and education and start a business. Families take car loans and mortgages. Balancing the federal budget now means doing nothing about the rate of unemployment, not borrowing the money to fix crumbling roads and bridges, not being able to help the victims of disasters like floods and tornados.

President Obama has tried to be agreeable, but it doesn’t work. Trying to run a presidential campaign based on teach-ins on macroeconomics may be difficult, but we desperately need an electorate that understands the issues. And order a load of t-shirts that read “Yes We Keynes” – because the alternative is disaster.

Sam Uretsky is a writer and pharmacist living on Long Island, N.Y. Email

From The Progressive Populist, August 1, 2011

News | Current Issue | Back Issues | Essays | Links

About the Progressive Populist | How to Subscribe | How to Contact Us

Copyright © 2011 The Progressive Populist
PO Box 819, Manchaca TX 78652