Someone who gets it
Friday, February 6th, 2009Thank heavens for the Washington Post’s Steven Pearlstein. I hope every Congressional staff reads his column today, where he lays out what “stimulus” means and how it affects the economy.
I have to agree with him; the economic illiteracy of Congress is staggering, and too much of the debate on the Hill is stuck in the Reagan years.
Of course “learn some economics” is a blunt argument. Plenty of men with impressive economic pedigrees are no more than shills for industries, the wealthy elites, unions, real estate. They’ll have you believe that cutting taxes raises revenues, or deficits don’t matter, or real estate only goes up, or farm subsidies create food security, or taxes on profits impede employment.
But the column still hits important points. Tax cuts increase debt to put some money into the economy. Spending increases increase debt to put more money in the economy than tax cuts do. And some spending on consumption may help the economy in the short term, but spending on investment helps in the short term and paves the way for tomorrow’s prosperity.
This is not hard. But it’s harder than “ungh, taxes always bad, ungh ugh ugh” or “ungh, buy more stuff so recession end, ungh ugh ugh” which is sadly what we’ve come to expect from Congress.