I am 100% with Lou P on this. Robert N. or Max might be correct that
the tax cuts for the rich might give a little bit of a stimulus. The
problem is the long term consequences. Here is a snippet from The
Confiscation of american Prosperity on the subject.
Traditionally, Republicans represented themselves as the party of
fiscal sobriety, insisting that balanced budgets were essential to
solid economic performance. In the 1980s, a new strategy began to
emerge. Conservatives began to welcome huge deficits.
For example, in 2001, President George W. Bush expressed his support
for this tactic, reporting that the government's fast dwindling
surplus (created by his own tax cuts) was "incredibly positive news"
because it will create "a fiscal straitjacket for Congress" (Sanger
2001). Similarly, California Governor Arnold Schwarzenegger said that
he wanted to use his budget plan to "starve the public sector" without
raising taxes, "because we don't want to feed the monster" (Delsohn
2005).
Nobody has been more adamant about pursuing this strategy than our
old friend, Grover Norquist, who told an interviewer: "I don't want
to abolish government. I simply want to reduce it to the size where I
can drag it into the bathroom and drown it in the bathtub" (Norquist
2001). Conservative economists, such as Milton Friedman, agree,
although in less colorful terms. They applaud growing federal budget
deficits created by tax cuts, which will eventually create pressure to
cut social programs and regulation (Friedman 1988; 2003).
In reality, all except a handful of principled libertarians have no
interest whatsoever in thoroughly starving the beast. To the extent
that government subsidizes and protects business, conservative class
warriors welcome the governments' engagement with open arms. Only
when the government lends support to the poor and disadvantaged does
the right wing regard state spending as an abomination.
The conservative class warriors are just as opportunistic in their
attitude toward regulation. The regulatory system in the United
States is hardly the fierce beast that business pretends it to be.
For example, popular protests by farmers who felt cheated by the
railroads led to the creation of the Interstate Commerce Commission,
one of the first regulatory agencies in the country. Yet the
railroads privately welcomed the Interstate Commerce Commission,
realizing that only people from within the industry would have the
expertise to regulate it. Besides, the commission would diffuse
popular anger toward the railroads.
Since then, industry has perfected the practice of hiring regulators
soon after they leave government. In this way, regulators understand
that they will harm their career path if they behave in a way that
upsets industry.
The Republicans invented another technique to undermine inconvenient
regulation. Agencies, such as the Patent and Trademark Office and the
Food and Drug Administration, now fund much of their operations from
fees paid by those whom they regulate. This arrangement leads them to
view those whom they regulate as clients, even though their real
client should be the public at large. Rather than subjecting drugs or
patents to careful scrutiny, these agencies put pressure on their
staff to process applications as quickly as possible in order to
generate more revenue.
For programs that directly serve the general population, such as
education or public transportation, inadequate resources prevent them
from operating satisfactorily. The resulting dissatisfaction with
these programs strengthens the case for privatization.
In short, the right wing strategy is to intentionally create a crisis
of financial disorder with the expectation that a sense of urgency
will panic the public into acquiescing to the preferred remedies of
the conservatives. A measured discussion of the real issues would
certainly be more likely to lead to a healthy economy, but a rational
dialogue would probably not result in the one sided outcome that the
right wing desires.
--
Michael Perelman
Economics Department
California State University
Chico, CA
95929
530 898 5321
fax 530 898 5901
http://michaelperelman.wordpress.com
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