Closet Keynesians

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    Aug 16, 2011 5:11 PM GMT
    Rick Perry is one of them.
    texasoutlierspending2.jpg?uuid=8hE5VMgZE
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    Aug 16, 2011 5:15 PM GMT
    So is Judson Phillips (Tea partier):
    http://www.economist.com/blogs/democracyinamerica/2011/08/stimulus-thinkingBut what's amazing here, obviously, is that Mr Phillips is justifying building aircraft carriers because government spending creates jobs and stimulates the economy. And he's right about that! But it seems that there are no other things the government spends money on, apart from defence, that Mr Phillips believes can stimulate the economy. He appears to believe that while government spending on aircraft carriers leads to workers getting hired, spending their paychecks, and helping the recovery, government spending on highways, high-speed rail, education, and health care does not. Meanwhile, Mr Phillips also believes, as he argued in a Washington Post op-ed last week, that the government shouldn't borrow any more money, because that's leading us to economic ruin, like Greece. And he believes that the government shouldn't raise taxes, because that kills jobs. So where is the money supposed to come from? We're left with one possibility: Mr Phillips believes that we should build more aircraft carriers to stimulate the economy, and fund it by cutting other government spending programmes. But obviously when you cut other government spending programmes, the people who were working for those programmes lose their jobs, stop receiving paychecks, and stop spending money, which harms the recovery. And then there's the question of how many $2.6m prostitute-safe-drinking programmes you can find to cut. You need 3,500 of them to fund your $9 billion aircraft carrier.

    The tea-party movement has spent the past year arguing that stimulus doesn't work and cannot, by nature, create more jobs or economic activity. The idea that a major tea-party figure can turn around and make a bog-standard argument for defence spending on Keynesian grounds testifies to a startling capacity for cognitive dissonance. I'm impressed.
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    Aug 16, 2011 6:06 PM GMT
    q1w2e3 saidRick Perry is one of them.
    texasoutlierspending2.jpg?uuid=8hE5VMgZE




    Rick Perry - a big government big spending fiscal liberal from Texas.
    Just like George W. Bush.
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    Aug 16, 2011 10:39 PM GMT
    In fact, if Obama is defeated, I predict a major stimulus in the hands of a Republican president, who will find it convenient to blame Obama for the cuts while taking all the credit for the jobs created by boosting government spending.
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    Aug 16, 2011 11:04 PM GMT
    southbeach1500 said
    q1w2e3 saidIn fact, if Obama is defeated, I predict a major stimulus in the hands of a Republican president, who will find it convenient to blame Obama for the cuts while taking all the credit for the jobs created by boosting government spending.


    Stimulus? Paid for how?????


    By borrowing money, and then growing the economy to increase tax receipts to pay back the debt. icon_rolleyes.gif
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    Aug 16, 2011 11:28 PM GMT
    southbeach1500 said
    Christian73 said
    southbeach1500 said
    q1w2e3 saidIn fact, if Obama is defeated, I predict a major stimulus in the hands of a Republican president, who will find it convenient to blame Obama for the cuts while taking all the credit for the jobs created by boosting government spending.


    Stimulus? Paid for how?????


    By borrowing money, and then growing the economy to increase tax receipts to pay back the debt. icon_rolleyes.gif



    Wrong answer.


    Only to you. For the majority of people who live in reality, this is what governments do to stimulate their economies. It's worked for more than a 100 years everywhere it's been done, including the US from 2009 - 2011.

    On the other hand, trickle down economics and cutting during a recession not only further harm the economy but often lead to civil unrest as seen in Britain.

    You're welcome to try and find a historical variation but since one doesn't exist, good luck to you.
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    Aug 16, 2011 11:36 PM GMT
    Sigh, with ahistorical people like SB, it may very well take a fake alien invasion to stimulate the economy back to health. That's probably the only way Tea Partiers and the GOP will understand, at least until a GOP president is elected. Then the scales will fall from their eyes like a miracle.

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    Aug 16, 2011 11:43 PM GMT
    southbeach1500 said
    Christian73 saidFor the majority of people who live in reality, this is what governments do to stimulate their economies. It's worked for more than a 100 years everywhere it's been done, including the US from 2009 - 2011.


    It hasn't worked because it doesn't work.


    Incorrect.

    I now believe that you are among the Tea Baggers who are so obsessed with getting the black guy out of the White House that you'd rather see America fail than the economy get better before the election. It's really sad.
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    Aug 16, 2011 11:52 PM GMT
    southbeach1500 said
    Christian73 said
    southbeach1500 said
    Christian73 saidFor the majority of people who live in reality, this is what governments do to stimulate their economies. It's worked for more than a 100 years everywhere it's been done, including the US from 2009 - 2011.


    It hasn't worked because it doesn't work.


    Incorrect.

    I now believe that you are among the Tea Baggers who are so obsessed with getting the black guy out of the White House that you'd rather see America fail than the economy get better before the election. It's really sad.



    "The black guy out of the White House" huh?

    Our President is our President, regardless of gender or race. You liberals always playing the race card... just like "Ed Schultz" did the other night on MSNBC.

    http://www.realjock.com/gayforums/1753367


    Noting that the animosity toward Obama is largely driven by racism isn't "playing the race card" any more than if you got gay bashed tonight, pointing out the inherent homophobia would be playing the "gay card." icon_rolleyes.gif
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    Sep 01, 2011 2:45 AM GMT
    If Perry was a closet Keynesian, that closet must be huge and his anti-government supporters are blind:

    tx_Kyns.png
    tx_Kynstbl.png

    http://jaredbernsteinblog.com/texas-and-the-gov%E2%80%99t-better-friends-than-you%E2%80%99d-think/
    At least better than you’d think listening to Gov Perry’s anti-government rhetoric. When he announced his candidacy for President the other day, he growled that his goal as president would be to make Washington “as inconsequential in your lives as I can.”
    ...
    How did that happen? Well, Gov Perry has a funny way of going about that “inconsequential” thing. According to many news accounts from back in the Recovery Act days:

    “Turns out Texas was the state that depended the most on those very stimulus funds to plug nearly 97% of its shortfall for fiscal 2010, according to the National Conference of State Legislatures.”

    Now, I’ve got no problem with a state government using Recovery Act funds to retain or create jobs. In fact, the figure and quote above shows Texas to be following a traditional Keynesian game plan: as the private sector contracts, turn to the public sector to temporarily make up part of the difference.
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    Sep 01, 2011 1:25 PM GMT
    RickRick91 said
    q1w2e3 saidRick Perry is one of them.
    texasoutlierspending2.jpg?uuid=8hE5VMgZE




    Rick Perry - a big government big spending fiscal liberal from Texas.
    Just like George W. Bush.


    Wooooow. We ACTUALLY agree on something! icon_eek.gif
  • Lincsbear

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    Sep 01, 2011 2:16 PM GMT
    Southbeach,take a look at British history.The last time a Conservative-Liberal coalition government tried to deal with a recession by huge cuts in public spending(1921),the result was a deepening recession(aggravated by the Wall Street Crash and the Great Depression in the USA) until 1936-fifteen years of slow or no growth due to loss of demand!
    And what solved this recession?Massive public spending ie rearmament!
    What pulled your country out of the Great Depression in the 1930s?
    If your government tries to balance its books by big cuts in public spending,then it will be repeating the mistakes of 1929-1932;your economy will lanquish in recession/sub-recession for a decade or more;and there `ll huge levels of unemployment and all the social ills that go with it.See the recent unrest here(and in the 1920/30s.)
    q1w2e3 is right.The more sensible Republicans know this only too well,but deny it for party politics.
    The biggest of 'big government' (not just financially) projects was President Bush`s wars in Afghanistan and Iraq!
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    Sep 01, 2011 4:12 PM GMT
    While much of the spending may not have been the choice of Perry, for a far more balanced look at his spending, see here:

    http://www.star-telegram.com/2011/07/16/3225809/texas-spending-kept-rising-for.html

    Perry's office and some budget experts say the entire state budget is not a fair gauge of a governor's fiscal record, since portions such as federal funding are not under his direct purview.

    "Lawmakers and the governor have no control over that," Perry spokeswoman Catherine Frazier said.

    Fed largely by state taxes and fees, general revenue has typically made up roughly half the Texas budget. It's the part of the budget that lawmakers spend most of their time arguing over during legislative sessions. Much of the rest of the budget is tied by provisions in federal law and the Texas Constitution.

    When general revenue spending is examined by itself, the trends match better with the fiscal conservative image that Perry promotes. Though general revenue spending has grown with nearly every budget since Perry took office, it actually fell over the last decade an average of 0.6 percent every two years once those numbers are adjusted for inflation and the state's booming population growth. It rose during Bush's tenure.

    "Obviously fiscal restraint is always something the governor has made a priority," Frazier said. "He's the only Texas governor since World War II that has cut general revenue spending."

    That distinction is one that Perry has touted repeatedly in recent years, from campaign commercials to the biography on the governor's office website.
    Mike Hailey, who runs the Austin political site Capitol Inside and served as Lt. Gov. Bob Bullock's press secretary, said that general revenue spending is "a more telling gauge" of a governor's fiscal record but that the rest of the budget is relevant as well.

    He also noted that the Legislature chose to accept billions in federal stimulus money in 2009, which temporarily pumped up spending.


    So where did that spending come from? Stimulus money, provisions in federal law and the Texas Constitution.

    On the subject of stimulus money:

    Frazier made clear that Perry is aware of the balancing act that comes with federal funds.

    "Texas taxpayers send that money to Washington," Frazier said. "We deserve to have our fair share back as opposed to seeing that money go to other states. But there is that separate concern that federal spending has grown out of control and needs to be reined in."
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    Sep 06, 2011 6:11 PM GMT
    More closet Keynesians, at least when Bush was the president and the closet is called history.

    http://www.washingtonpost.com/blogs/ezra-klein/post/why-did-the-gop-turn-against-stimulus-ask-a-psychologist/2011/08/25/gIQADugV6J_blog.html#pagebreakIn 2001, Grover Norquist called a national sales-tax holiday “exactly the kind of immediate stimulus our shell-shocked economy needs now.” Norquist went on to quote George W. Bush’s chief economist, Glenn Hubbard, saying we needed stimulus “sooner rather than later.” Sen. Olympia Snowe (R-Maine) introduced a bill to that effect.

    Around the same time, Rep. Paul Ryan (R-Wis.) held a hearing in which he invited Kevin Hassett, a conservative economist based at the American Enterprise Institute, to make the case for a fiscal stimulus. “The economists who studied this were quite surprised to find that fiscal policy in recessions was reasonably effective,” Hassett testified. “It is just that folks tried a first punch that was too light and that generally we didn’t get big measures until well into the recession.”

    Ryan was delighted by his answer. “That is precisely my point,” he replied. “That is why I like my porridge hot. I think we ought to have this income tax cut fast, deeper, retroactive to January 1st, to make sure we get a good punch into the economy, juice the economy to make sure that we can avoid a hard landing.”

    So not only was it non-controversial that deficit-financed stimulus spending was an effective and desirable way to fight economic downturns, but it was taken as obvious by Paul Ryan — Paul Ryan! — that the big danger was that you did too little. Now, of course, Ryan takes the initial stimulus’s inability to fully combat the recession as evidence of the policy’s failure, even though we now know the recession was deep enough that standard calculations — the sort of calculations Hassett was referring to in his testimony — would have argued for a stimulus of more than $2 trillion.