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Lather, Rinse, Repeat

June 23, 2011

Anyone catch this one from yesterday?

WASHINGTON, June 22 (Reuters) – Democratic leaders called on Wednesday for new spending and tax cuts to boost the sluggish U.S. economy, setting up a fresh hurdle for bipartisan efforts to head off a government debt default this summer.

At the same time, a new report warned that the country could face a European-style debt crisis unless Washington cuts spending or raises taxes.

So the Dems in congress are reading from the paper that says we have to stop spending, and they’ve apparently translated that to: “Hey, let’s do some more infrastrucutre spending and claim that we’ll recover it in taxes later for budget neutrality!”  Don’t believe me?  Believe Senator Schumer: “’This is a stimulus program,’ said Sen. Charles Schumer (D-N.Y.), the No. 3 Democrat, adding that a package would be paid for in the long run as part of the deficit reduction package.”

Veronique de Rugy wonders if this is an admission that the last Stimulus failed. Victor Davis Hanson is a bit more biting:

The old Democratic strategy of playing the adolescent and leaving it to the Republicans to make the tough cuts, while they demagogue deficit reduction as cruelly pushing grandmother over the cliff — with ample reference to the “Bush did it” boilerplate and the subtle use of the race card — was irresponsible. But it was better than the current notion of borrowing yet another round of hundreds of billions more to “stimulate” the moribund economy — an idiotic idea doomed to fail.

The situation reminds me of the drug addict who cannot go on with his daily dose and yet cannot stomach the symptoms of withdrawal, and so gives up and goes back to regular fix, determined to enjoy the hospital ride to the emergency room.

Ouch.

It’s one thing to make a point until people repeat it back to you (which is my first rule of strategy).  At this point, most business is just wondering when everything’s going to be over, and they’re holding back on hiring to see if it’ll clear.  Jobless claims rose again this week, and I’m not sure that this summer is going to be good news for pretty much anybody.  Now we have Democrats wanting to put more spending into the mix to see if that can boost people hiring.  Well, not if it’s all on ephemeral projects that feed labor, but don’t actually provide long-term opportunity.

At least the Republicans appear to be trying something different in driving the spending cuts and targeting tax relief.  But I’m also not optimistic that they’ll hold on the debt ceiling, since they’ve already acknowledged that they’ll eventually raise it.  This is a massive showdown of old ideas vs. older ideas to see which one makes more sense to the public.  Hang on for the bumpy ride.

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2 Comments leave one →
  1. Ellen D. permalink
    July 2, 2011 10:35 am

    Well, I guess the Obama administration finally figured out that the high price of oil is affecting the prices of other goods, including food. Must have also been reading reports where the majority of Americans don’t think the economy is improving, mainly because they are getting hit by the high food and gas prices, plus unemployment is continuing to rise.

    Unfortunately, the solution (which seems to be largely touted as a political maneuver) was to release a few million barrels from the strategic oil reserve, sigh.

    • July 5, 2011 9:00 pm

      Ellen, I think it was mostly that the administration wanted to be seen as doing something, rather than nothing. Of course, sometimes nothing needs to be done.

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