Thechoral complaint emanating from every mainstream-media outletand the mouth ofnearly every mainstream punditis that the federal government is spending toomuch and that the public will not stand for it anymore. "We must bringdeficits under control!" they tell us. "The American people distrustgovernment because spending is out of control!" they cry. Rick Santelli,the loudest mouth on the CNBC business cable channel and a revered figure inthe tea party movement, put it most succinctly the other day when he screamed,"Stop spending!"
Cuttingspending is not just bad economics; it's bad politics, too.
Demandsfor the government to stop spending usually come with an asterisk and afootnote: Stop spending on everyone except me. A self-styled conservative inCongress who supposedly hates spending will vote against extending unemploymentbenefits, then turn around and protect federal subsidies to wealthy corporatefarmers. Other conservatives will fight against increased spending on masstransit, new schools or infrastructure, while promoting bloated weaponsprograms that the Pentagon doesn't even wantbecause the contractor has donatedto their campaign or operates a manufacturing plant in their districts. Cutspending, but don't cut spending on my priorities, no matter how wasteful.
Evenif hypocrisy were not so rampant, however, the demands to slash governmentspending at this stage in the economic recovery are profoundly in error. Whileone pundit after another warns of the risks of growing deficits, none of thosepotential risks is imminent. Instead, the nation and the world face the risk ofa renewed recession, worse than the lastjust as the country sank intorecession again in 1937, following the first signs of growth after the GreatDepression.
Corporateinvestment and consumer confidence aren't nearly strong enough to provide thenumber of new jobs neededand only when employment begins to move sharplyupward will revenues begin to grow and deficits start to shrink.
Polls Show Support for Spending
It'sworth repeating: Cutting spending is not just bad economics; it's bad politics,too. The Obama administration's stimulus spending last year was just enough toprevent the Great Recession from deepening into another depression, but notnearly enough to lift the country toward a broad and full recovery. Lacking thecourage of their traditional convictions, the president and his Democraticmajorities in Congress tried too hard to please the Republicans, theconservatives and the Washingtonpress corps. Trimming the stimulus too much and refusing to push hard for asecond round this year has made the Democrats look weakand left too manyworking families in distress.
Thenoisy Santelli and the publicity surrounding the tea party movement havefostered the misleading notion that most Americans oppose spending to put thecountry back to work. In fact, as Michael Lind pointed out recently atSalon.com, the latest USA Today/Gallup Poll shows that asubstantial majority favors more spending rather than less. Published lastmonth, that survey reported 60% support "additional government spending tocreate jobs and stimulate the economy," with fewer than 40% opposed.
ForDemocrats hoping to stem their expected midterm losses in November, that pollcontained an important message. Fully 83% of Democratic voters and 52% ofindependents said that they support a second round of stimulus spendingwhile61% of Republicans were opposed. The Republicans who favor more spending,nearly 40%, are most likely to be white working-class males who have lost theirjobs or fear losing them. Why are Democrats in Congress and the White Housemissing the opportunity to motivate their own base, while appealing toindependents and disaffected Republican workers?
Theyare listening too closely to the conventional wisdom, that's whyand as always,it is leading them in the wrong direction.
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