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Monday, February 07, 2011

Issa: We've Know for Decades That the Policies I Called for Don't Work

Republican House member Darrell Issa has an op-ed in the Financial Times complaining that the stimulus did not stimulate (contrary to research such as this that finds "programs to support low-income households were highly stimulative, as was spending on infrastructure projects"). He says:

The abysmal results came as no surprise to those who knew that the Keynesian doctrine of spending your way to prosperity had been discredited decades ago.

Then it must of surprised him or, as is more likely, he doesn't actually know what Keynesian economics is. This is what he said around the time when the stimulus package was put in place. His complaint is that the stimulus package doesn't come online quickly enough, and doesn't do enough for infrastructure (he also complains that the tax cuts aren't permanent):

Economic Stimulus: There is bipartisan agreement for emergency spending on infrastructure and tax cuts that will create new jobs and reinvigorate private sector investments. Unfortunately, H.R. 1, the "American Recovery and Reinvestment Act of 2009," falls short on both fronts. ...
To respond to an emergency, you must act quickly. According to the Congressional Budget Office, only 7 percent of the $355 billion in discretionary spending included in the bill would be injected into the economy by the end of fiscal year 2009. By the end of 2010, only 12 percent of the funds set aside for highway construction will be spent.
Stimulus funds must be targeted to be effective. Only 3 percent of the $825 billion will go toward road and highway construction that creates jobs and aids individuals and private businesses alike. ...
This bill will grow the government and miss an opportunity to reinvigorate the economy. An effective stimulus can be accomplished through tax cuts and targeted spending...

Targeted spending and tax cuts are effective stimulus, and he supports them, but we've known for decades that such Keynesian remedies don't work? The mystery of the GOP's credibility on economics continues...

    Posted by on Monday, February 7, 2011 at 04:50 PM in Economics, Fiscal Policy | Permalink  Comments (22)


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