For Example
I know that this is old hat, but it bears pointing out.
Conservatives claim that Obama is “bankrupting America” because, in response to an economic crisis, he put forward a stimulus bill in his first month in office which will eventually cost the United States a total of $787 billion.
On the other hand, conservatives to this day say that George W. Bush saved the American economy almost exactly eight years ago because, in response to an economic crisis, he put forward a tax cut plan (primarily benefitting rich people) in his first month of office which was projected to cost the United States a total of $1.6 trillion.
I’m pretty sure that $1.6 trillion is something like double $787, but I didn’t use a calculator to check. Of course, since 2001, inflation has made that $1.6 trillion into $1.9 trillion, but who’s counting? Well, these guys are (PDF), actually, and they say that Bush’s overall tax cuts wound up costing the United States $2.5 trillion. Again, no calculator, but I think that’s triple what Obama spent.
So: Bush spends $2.5 trillion in tax cuts mostly for rich people, and he saved the economy, while Obama spends $787 billion on a stimulus to create jobs, and he’s bankrupting us.
Did I miss the part where conservatives offered a cogent explanation of how these two opinions are reconcilable?
Careful about “costs” here. Money is money, AFAICT it really doesn’t matter who has it, government or the private sector. What matters is WEALTH, which is not money but the durable capital, material, and social improvements we accomplish through labor.
Japan is a bafflingly bizarre case of this to me. It is allegedly a nation of savers, with savings amounting to 24% of its GDP. Yet it has a national debt of 160% of its GDP. The crossover here is that one man’s savings is another man’s debt. Part of the infrastructure investment over the past decade-plus was improving the wealth of the countryside — community halls, better ground transportation infrastructure, all those dams, etc. It’s debatable how much productivity and durable well-being is being gained by these investments, but at least the spending yielded concrete results, often literally of course.
In Conservative Brain, “gummint-bad market-good”, so the Bush tax cuts of this decade theoretically could have resulted in better investment in wealth-creation enterprise by redirecting low-impact government spending to the private sector that would find more accretive (less consumptive) uses for the capital.
Of course, nothing of the sort happened, instead all that money starting chasing the dual housing and stock bubbles (the latter largely driven by earnings powered by the money being generated by the housing sector), to utterly disastrous (if predictable) short-term results.
You really need to look at money supply to understand what’s going on. MZM has doubled this decade, from $5T to $10T. Back in the early 90s it was just over $2T.
http://research.stlouisfed.org/fred2/series/MZM
As for what the $800B is buying us, it is mainly fighting off a deflationary cross-default spiral. Very much like Japan of the late 80s, too much debt was taken on too fast this decade, and unwinding who owes who what is going to be most painful, just like Japan of the 90s.
Living in Japan for most of the 90s was very educational to me. I’ve seen this movie before.