I’ve heard so many Republicans rail against the proposed stimulus package and none of them have any idea what they’re talking about.
Why not ask an economist? A reporter for the Notre Dame Observer, Robert Singer, sat down with some economics professors to get their take. The bottom line? The stimulus will help, it will work:
According to Economics Professor James Sullivan, one of the major reasons why legislators are calling for an economic stimulus – a massive increase in government spending – is that widespread uncertainty has caused a decrease in overall demand. Lacking confidence about their job security, people are less willing to make purchases or investments.
“People expect the economy not to recover soon and that has a self-fulfilling prophecy to it,” he said. “If you don’t think the stock market will increase, you won’t invest in the stock market.”
While the economy probably won’t suffer indefinitely without a stimulus, a bill could significantly shorten the downturn, according to Economics Professor Nelson Mark.
“In the long run, it’s not necessary, but who knows if the long run is going to be 10 years or 20 years,” he said. “So I think the question is if the government is capable of lessening the severity of the recession and if what it can do offsets the long-term costs of doing so, then it should do it.”
If people are unwilling to spend money, then the government can do it for them by cutting taxes, sending money to states, making investments or hiring workers for public works.
“The government can jumpstart things and encourage businesses to invest to get out of this sentiment of pessimism,” Sullivan said.
So much of the economy is a state of mind, but it’s more than that as well. Republicans have been screaming about spending in the bill, but government spending is actually a good thing, according to the real experts:
Direct government spending on infrastructure or energy investment would be fail-safe ways to increase overall demand, according to Sullivan, but tax breaks to individuals would allow them to make their own consumption choices.
“If the government spends it right away, then they spend it right away,” he said. “Consumers might choose to hold onto it, so there’s a little bit of a risk there. Ideally you’d like the consumers to spend it, because they could spend it on what they want.”
Economics Professor Martin Wolfson focused on aspects of the bill that call for more direct government spending.
“I think the best parts of the bill are the parts that directly put people to work,” he said. “Infrastructure spending, investing in green technology, those parts of the bill that keep people from losing their jobs and keep people receiving needed public services.”
I don’t trust the Republican solutions at all any more. Niether should you. Their don’t-confuse-me-with-the-facts mentality has failed us. Holding on to a stubborn ideology in the face of overwhelming evidence to the contrary is not brilliance, it’s stupidity incarnate.
We can bring our economy back. The stimulus bill will work.
That makes Karl Rove very nervous, but it should give you hope.