The Democratic response to the economic crisis has its problems, but let’s face it, the current Republican response is totally misguided. The House minority leader, John Boehner, has called for a federal spending freeze for the rest of the year. In other words, after a decade of profligacy, the Republicans have decided to demand a rigid fiscal straitjacket at the one moment in the past 70 years when it is completely inappropriate.
The real goal, I think, is to protect the Bush tax cuts. The tax cuts are scheduled to expire soon due to budget games the Republicans played to get the tax cuts in place, but they never intended to actually let the tax cuts be reversed. Now that they are out of power, something they didn't expect would happen, there is a possibility that the increase in taxes Bush scheduled to game the budget figures will be allowed to happen after all. However, if the political winds move against more spending - something Boehner is trying to facilitate - and the economy remains weak, the case for allowing the scheduled Bush tax hikes to occur is harder to make.
Update: Paul Krugman:
Boehner said Americans want government to practice the same financial restraint they have been forced to exercise: “It’s time for government to tighten their belts and show the American people that we ‘get’ it.”
and I wonder if this country can handle the crisis we’re in. Remember, John Boehner is, in effect, the second-most influential member of the GDP...
What’s insane about Boehner’s remark? He’s talking about the current economic crisis as if it were a harvest failure — as if we faced a shortage of goods, so that the more you consume the less is left for me. In reality — even most conservatives understand this, when they think about it — we’re in a world desperately short of demand. If you consume more, that’s GOOD for me, because it helps create jobs and raise incomes. It’s in my personal disinterest to have you tighten your belt — and that’s just as true if you’re “the government” as if you’re my neighbor.
Plus, who is “the government”? It’s basically us, you know — the government spends money providing services to the public. Demanding that the government tighten its belt means demanding that we, the taxpayers, get less of those services. Why is this a good thing, even aside from the state of the economy?
Again, this is what the leaders of a powerful, if minority, party think. Can this country be saved?