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Scott Walker: Less Than Stimulating Arguments

Posted by Chris Liebenthal on January 23, 2009

Last week, a couple or three right wing bloggers tried to rally the troops on behalf of the myopic Scott Walker and his foolish decision regarding the stimulus package that will be coming soon after Obama’s inauguration. Keep in mind that due to his foolhardy stance, even his own allies are throwing him under the bus.

Apparently, judging from what I’ve seen thus far, the turnout was less than stimulating itself. I’ve only seen a few pieces of writing coming out in Walker’s favor. One was an anonymous blogger who was more concerned with her photoshop skills and bumper sticker logic. (The Chief has a response to that which uses stronger language and is more direct.) Another was Patrick McIlheran offering another nonsensical, based in fantasy, loose with the facts piece. The third was from Aaron M. Rodriguez, writing for the Hispanic Conservative, who spent most of his time trying to distort a column by Eugene Kane.

The funniest part of Mr. Rodriguez’s piece comes at the end:

It is unfortunate that the Milwaukee Journal-Sentinel has become a bully pulpit for liberals like Kane to air their libelous attacks. Eugene Kane owes Scott Walker a personal apology. Columnists have no business using a trusted media source to make character attacks on public officials especially if they don’t have factual support.

I don’t know which is funnier. That he is calling the MJS a liberal bastion, or that there’s no facts showing Walker dead wrong on the issue.

Mr. Rodriguez also cites Walker’s op ed piece from two Sundays ago, in which Walker was trying to defend his poor decision making and arguing that tax cuts were the way to go:

The real way to stimulate the economy is not to put more money into the hands of the government but into the hands of the people. For months, I have called for tax cuts to get this economy going again.Unlike infrastructure projects that take months – if not years – to have an impact, tax cuts can go into effect immediately. This will truly stimulate the economy.

[…]

And it worked for President Ronald Reagan. In 1983, the year that the Reagan tax cuts went into effect, the national economy started the largest peacetime economic boom in American history. During this time, 5 million new businesses and 20 million new jobs were created. Tax reductions led to economic prosperity.

Would someone please cue Walker in on the fact that this is not a period of peace with Obama walking into not one, but two, wars that Bush started?

To further deflate Walker’s argument and to highlight that his position is nothing more than a poorly thought out attempt at grandstanding, it was reported over the weekend that even conservative economists are supporting the Democratic stimulus plan. Included among these is Martin Feldstein, Reagan’s top economic advisor. You know, the guy that came up with the plan that Republicans forever hold so dear.

Anyway, from the article:

Even Martin Feldstein, a professor of economics at Harvard University who served as chief economic advisor to President Reagan and is considered the dean of the country’s conservative economists, has expressed support for a stimulus plan.

“Countering a deep economic recession requires an increase in government spending to offset the sharp decline in consumer outlays and business investment that is now underway,” Feldstein wrote in the Wall Street Journal last month. “Without that rise in government spending, the economic downturn would be deeper and longer.”

The article also goes on to explain why this is so:

But so far, Republicans have not demanded new tax cuts. For one thing, although permanent tax cuts can foster long-term growth, in the short term most economists agree they create less economic demand — that is, they are less “stimulative” — than direct government spending.

Economists explain the spending-versus-tax-cut debate this way: When the government spends $1 to buy an item or a service, economic output (or gross domestic product) goes up by $1. Then it goes up a bit more because whoever gets that $1 spends at least part of it buying supplies or paying workers, who in turn use it for food, gas or medical care. So $1 of direct government spending becomes roughly $1.57 of GDP, according to projections by economic advisors to President-elect Barack Obama.

Tax cuts work differently. If a person gets a tax cut of $1, there is no guarantee he or she will spend it, so it has no immediate effect on GDP. And the worse the economy and the greater the fear of bad times ahead, the more likely they are to hold on to that dollar.

Obama’s advisors assume that the $275 billion in tax cuts in the stimulus proposal would have no effect on GDP for the first quarter after the plan is passed. After that, they expect taxpayers and businesses would begin to spend the money they save from taxes. Their models suggest that a $1 tax cut would eventually produce 99 cents worth of demand within two years.

If I may remind the gentle reader, this has been argued before both here and at Michael Rosen’s blog.

Not only are Walker’s allies throwing him under the bus, but now the people that he claims to emulate are backing the bus up for another go at him.

Can you say Weasel Fritters?

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