Sunday, February 23, 2014
New York Times Editorial On The Value Of The Fiscal Stimulus
The non-partisan Congressional Budget Office has evaluated the beneficial effects of the stimulus which kept the recession in the US from deepening. This editorial documents some of the benefits of the stimulus and argues that it should have been larger. It is also critical of Republicans who did what they could to block the fiscal stimulus, and lied to the public (with a lot of help from their friends) about the failure of fiscal stimulus. The Republicans worked hard to convince the public that budget deficits were a bigger problem than unemployment (again with a lot of help from their friends). What they did not tell the public is that they love fiscal stimulus when a Republican is in the White House. Their patron saint Ronald Reagan ran some of the biggest budget deficits in US history. His fiscal policies were pure Keynesian. He cut taxes substantially and he increased federal spending. George Bush did the same thing. He even argued that his tax cuts were necessary to stimulate the economy and he spent billions on a war in the Mid East. We heard nothing from the party of fiscal responsibility during the Reagan and Bush administrations. Their only concern is political. They want a strong economy when one of their own is in office and they prefer a weak economy when they do not hold the presidency.