Thursday, July 15, 2010

Unhappy Economics

I’m not an economist by any stretch of the imagination, but the consensus among the ones I know and respect is that government belt-tightening in the middle of a recession is counter-productive. Therefore this statement by the president does not give them hope:

At a time when so many families are tightening their belts, he’s going to make sure that the government continues to tighten its own.

No, actually, history has proved that that doesn’t work. In 1937 after being hounded by the Republicans to stop spending money on New Deal projects, President Roosevelt cut government spending, and they had a relapse.

During bad economic times, the government is about the only entity that can spend money and get people working. That’s how economic stimulus works. And that’s also why the GOP is so adamantly opposed to it: when we have a good economy, it makes people happy, and that means they’ll vote for the people that made them happy, which makes the GOP unhappy. And if the GOP can’t be happy, then nobody can be happy.