Sunday, February 08, 2009

What the Players in the Stimulus Battle Really Want!

As Barack Obama prepares to barnstorm the country in a campaign style push to build support for the quick passage of an economic stimulus bill, I think it’s worth breaking down the apparent desires of the various players regarding this bill.

First of all, however, I want to highlight the most obvious truism spoken about the bill in recent days, which was Obama’s light hearted mocking of his critics while pointing out that “spending is the point” of stimulus! More specifically, as both liberal and conservative economists would likely agree, the point of stimulus is to get more money in circulation – by putting it in the hands of those who will turn around and spend it. The only real disagreement, on the surface, between liberals and conservatives is over how to get that money in circulation, with liberals favoring direct spending and conservatives favoring tax cuts as an alternative method of “putting more money in peoples’ pockets.”

That’s the basic political debate, albeit one filled with lots of blowhard posturing and hidden agendas that get in the way of the basic logic behind the point of the stimulus bill. So here is how I would characterize the real desires of these various players:

Barack Obama – He wants a bill that will work at easing the economic crisis, so that the initial steps of his presidency will be seen as a success.

Conservative Republicans – They want two things: the inclusion of as many tax cuts as possible that might provide benefits to the wealthy as “collateral stimulus;” and a reduction of actual stimulus such that the bill will fail and allow them to blame it on Obama.

“Centrist” Republicans – They want only one thing, which is to remain electable in their States. (It should be noted that in the House, there are no centrist Republicans; and in the Senate, there are only “Centrist” Republicans from centrist or liberal-leaning States who would otherwise have the same desires as Conservative Republicans!)

Centrist Democrats – They also seem to want only one thing, which is as little change as possible! This, I suppose, is the same as saying they want to remain electable in their more conservative districts or States (a benevolent interpretation), or that they are stealth Conservative Republicans (a more skeptical interpretation).

Mainstream Democrats – They are the hardest to peg as a group. Some undoubtedly want a bill that will be effective in turning around the economy; a few apparently just want some pork; and others (cough, Harry Reid, cough!) mainly want to avoid making the Republicans embarrass themselves with a real filibuster against saving the economy!

Majority of the American People - They wants a bill that will work at easing the economic crisis, so that the initial steps of Barack Obama’s presidency will be seen as a success.

So I guess the point of this exercise is to say that, with Obama set to conduct a series of town halls with real people about the stimulus bill, he will finally have a chance to talk to a group that he knows want the same thing that he does!

That group will likely be more accepting of the basic logic behind the point of stimulus than the members of Congress - which is that getting the money to those who will spend it is best accomplished by spending to provide jobs to those who don’t otherwise have them; and not by cutting taxes for those who already have sources of income being taxed (and who may have the flexibility to put the additional money in their pockets rather than spending it!)

3 comments:

  1. I do not understand why people are having diffculty understanding. The number of unemployed people (11.6 million) and the unemployment rate (7.6 percent) rose in January. Over the past 12 months, the number of unemployed persons has increased by 4.1 million. The Department of Labor reported today that nonfarm payroll employment fell sharply in January (-598,000) and the unemployment rate rose from 7.2 to 7.6 percent. Payroll employment has declined by 3.6 million since the start of the recession in December 2007, .... most of this mess happening only in past three months! And some wonder Obama is pushing so hard for a stimulus package. Is the Herbert Hoover approach, do nothing, all we need, leading us to a twelve year depression ??

    ReplyDelete
  2. Anonymous4:29 PM

    It seems like everybody agrees that the banks need to start lending again. They surely aren't going to lend to people out of work. It's pretty obvious that jobs are the major priority here. I hope this stimusus creates jobs. The conservatives want to hang on to their money and grab as much as they can any way they can. Nothing new about that. Progressives want Obama to be their mighty leader and succeed. That's me. Go Obama. Level the playing field.

    Giraffe

    ReplyDelete
  3. Anonymous4:49 PM

    stimulus



    giraffe

    ReplyDelete