The national right in this country sadly live in their own little world where creationism is real, climate change is a myth, tax cuts solve everything, Iraq was behind 9/11 and America has the best health care system on earth. They sadly have become very dogmatic and ideologically rigid like communists or theocrats.
FWIW, a few years ago the CBO (I think the CBO) did a study on the most effective ways to grow GDP via government. Supply side tax cuts were the worst of all the methods looked at, resulting in 10-40 cents of growth per dollar spent.
Considering corporations have 2 trillion in cash, record profits and the wealthiest 1% have mostly recovered from the recession, supply side tax cuts would be pointless.
First off, that does not logically hold. The power to destroy a thing is usually quite seprate from the power to creat a thing. Second, I did not say the government is powerless to help; only that it was not able to control things. It has some very large, blunt objects. Its power is destruction. That’s often quite useful, but a very limited tool that can only be fruitfully destroyed in certain times and places.
Edit: Thatw as the point fo the forest ranger analogy. A Ranger cannot create a single tree or bush, or even a blade of grass. He is sustained by the fruit of the tree and the meat of the creatures of the forest, but he did not make a single one grow, and probably did not even raise one on fodder he gathered himself. He can remove brush, and clear dead trees so something new can grow, and that’s about it.
Do you honestly not see the difference? Do you really see no literall, practical, effective limitation to the government’s attempts to create wealth? Do you actually not see that government’s powers are the ability to destroy? The government cannot create and it cannot control; it can destroy, and that marks the limits of its power.
History does not show me much of any example of governemnts successfully creating wealth on a large scale. I suppose you can show the tepid shuddering-along of Soviet Russia if you like (and you can keep it, too).
Look, you stated that the economy cannot be controlled. That is a broad statement, that includes effecting change on the economy, for good or ill. If you meant “Government cannot change the economy for the better” then you should have said that, but you didn’t. And that is simple right wing dogma. Government doesn’t need to “create wealth on a large scale” to effect positive change on the economy. Targeted federal spending and economic policy has a long, successful history of stimulating economic growth, that, once initiated, is self-sustaining, and wealth is created. Government is not the long term answer, and progressives don’t pretend it is. But we reject the incessant “Government is Ee-viiil!” blather from the right. Government is capable of stimulating growth that is beyond the power or will of the private sector. Denying this is just being obtuse to the lessons of history.
Except I didn’t say that. Nor would I say that. The two are not the same. I said the government control or create, economic growth. It can destroy it, and may do so strategically, but that’s about it.
Hell, since we’re throwing ideas out, here’s my plan:
Force deleveraging through a slow increase in the Fed funds rate.
Increase taxes on wealthy, corps. Include raising the cap on SS and Medicare.
2a. Use tax increase to pay down debt, shore up SS/Medicare.
Reinstall Glass-Steagall
Regulate derivatives
Stop blaming other people, admit our own personal culpability in this mess.
1&2 will likely make things worse before they get better - interest expense will go higher on mortgages, credit cards, auto loans, etc, causing the markets in those instruments to decline. That’s fine - we need to become a nation of payers, not borrowers. If you want the country to have a better balance of payments, make debt expensive again.
3&4 are (imho) common sense. The Citigroup experiment failed, and all the Great Recession did was remind us why Glass-Steagall was a good idea in the first place. And anybody who argues against the regulation of the derivatives market is captured by it.
5 will likely never happen. I must have read 20+ books (and scads of articles in newspapers, magazines and websites) on the various causes of the Great Recession (GR) and while it may be the fault of my focus (I tend to read about Wall Streeters), very, very few of them placed the blame of the GR on the average Americans willingness to go into debt. None of them (and very few of the posts on this board) have ever blamed people for taking out mortgages and buying homes that they knew they really weren’t qualified for - it was always somebody else’s fault: unscrupulous mortgage brokers, Wall Street fat cats, securitization, etc etc etc, but God Forbid that the guy who bought a $500k house on $50k salary be blamed - nope, that guy was always duped. Not his fault!
Honestly, until we can all look within ourselves to find out what behaviors we had that helped lead the US into this mess, I don’t know if it will ever get fixed. There’s 30 years of orgiastic excess that needs to be wrung from the economy before it can ever be truly repaired, but that’s never going to happen if we sit here blaming the other guy for their contribution while not reviewing our own actions that contributed.
Meh. Rather than hand people a pot of cash, arrange to forgive and/or pay off the debts they owe on actual assets, i.e. their houses, their cars, their college educations… Just handing out dough will help some people, but many others will just go on spending sprees that, while providing some possible short-term stimulus, will leave them even more screwed up a year from now.
Additionally, find cities where the foreclosures have hit the hardest. Move families into surplus newly-built-and-now-sitting-empty houses and bulldoze blighted neighborhoods. Put stimulus money toward infrastructure projects to improve roads, water systems, electrical grids, telephone and internet networks, and subsidize trade school educations so Americans who have some sense of gumption can pick up valuable skills as plumbers, electricians, machine operators, carpenters…
Just handing out cash… silliness. One segment of the population ends up better off (i.e. the segment that pays down personal debt and/or invests the money wisely), while a larger segment will stay the same or get worse (i.e. the segment that just spends it and gets nothing lasting as a result).
What are you saying? That people shouldn’t spend money if it’s given to them? To stimulate the economy, paying down debt is the last thing you want people to do.
I’d want them to pay down debt and have a permanent asset at the end (house, car[sup]*[/sup], education), as well as cities and states having up-to-date infrastructure (roads, bridges, water works, electrical grids) - not just pay off a chunk of their credit cards and rack up more debt. Encouraging more consumerism gives the economy a short-term bump, I admit, but how long will that last?
Meantime, making it easier for young adults to go to trade schools can pay off for decades.
[sup]*[/sup] Well, to the extent a car is “permanent”. Ideally it would a useful asset for at least a decade.
Well, ideally it helps bump us out of the economic trap we’re in, but paying off debt is just not the most productive use of stimulus funds. Imagine someone gets $10,000 of debt forgiven - they’re not going to turn around and put $10,000 in the economy in the next few months. They might put in $150 extra or whatever their loan payment was, but that’s such a poor return on each dollar of stimulus.
You raise a valid point, but I wasn’t trying to suggest issuing a “get out of debt free” card, but rather to keep people in precarious situations from sliding into bankruptcy and foreclosure.
Maybe not so much. For 1, having interest rates at absurdly low levels hasn’t seemed to help much. The cure for the housing problem is to increase confidence, increasing the number of people who wish to buy, and thus letting people know we really have hit bottom. Slowly increasing rates would also get some people to buy now, which also helps.
For 2, raising taxes on the wealthy would have little or no impact on consumption, and we don’t need any more investment money for the while, so I see no problems. Raising the SS cap affects more than the wealthy, and might have some ill effect, but it has to be done. I’d rather see the money go, right now, to infrastructure improvements, though the SS money of course goes to the trust fund.
But, on the whole this seems like a very reasonable plan, and so has no chance in the current climate.
