Robert Reich, a man far more knowledgable about the economy than I will ever be, makes his case:
How do we get out of this downward plunge?
Regardless of your ideological stripe, you’ve got to see that when consumers and businesses stop spending and investing, there’s only entity left to step into the breach. It’s government. Major increases in government spending are necessary, and the spending must be on a very large scale. In the last several weeks the President has put forward the outlines of a stimulus plan, and has left it to the House and Senate to fill in the details. A tiny portion of the details that made it into the House version should be stripped away because they seem like old-fashioned pork. But most spending in the bill is absolutely appropriate. My worry is there’s not nearly enough of spending to fill the shortfall in overall demand.
Yet at this very moment, Senate Republicans are seeking to strip the President’s stimulus package of many of its spending provisions and substitute tax cuts. Part of this is pure pander: They know tax cuts are more popular with the public than government spending, even though spending is a far more effective way to stimulate the economy (more on this in a moment). Another part is pure partisan politics: Republicans are emboldened by Obama’s willingness to court Republicans (taking three Republicans into his cabinet, bringing Republican leaders into the White House for consultations, putting all those business tax cuts into the stimulus bill in order to gain Republican favor) without getting anything at all back from the GOP. House Republicans snubbed the bill entirely. So, Senate Republicans say to themselves, what’s to lose?
Plenty. Millions more jobs and a full-fledged Depression, for example.
Can we get real for a moment? Take a look at this chart, which comes from calculations by Mark Zandy and his colleagues at economy.com. You see that each dollar of spending has much more impact than each dollar of tax cut.
Tax cuts just aren’t cost-effective stimulus. As much as Republicans love them, they don’t give us as much bang for our buck as government spending. And in an economy as bad as ours, the government is the only entity big enough to step in and get the economy moving again. You and I can’t create a new job, even if we get a big fat tax cut; the federal government, on the other hand, can step in and create millions of new jobs, something we need right now.
The Republicans lost the last two elections because their ideas failed and because they were not good stewards of the economy or the country. If we have to pass this stimulus over their objections, so be it. But years from now, when the 2010 elections are bearing down on us and the GOP is getting hit for voting against creating millions of new American jobs, they should remember that they had a chance to do some good for this country but threw it all away.